64th  Congress  ) 
1st  Session  ) 


SENATE 


J Document 
I No.  444 


RURAL  CREDITS  BILL 


COMPARATIVE  PRINT 


SHOWING 


S.  2986 


A BILL  TO  PROVIDE  CAPITAL  FOR  AGRICULTURAL  DEVELOPMENT,  TO  CREATE  A 
STANDARD  FORM  OF  INVESTMENT  BASED  UPON  FARM  MORTGAGE,  TO  EQUAL- 
IZE RATES  OF  INTEREST  UPON  FARM  LOANS,  TO  FURNISH  A MARKET 
FOR  UNITED  STATES  BONDS,  TO  PROVIDE  FOR  THE  INVESTMENT 
OF  POSTAL  SAVINGS  DEPOSITS,  TO  CREATE  GOVERNMENT 
DEPOSITARIES  AND  FINANCIAL  AGENTS  FOR  THE 
UNITED  STATES,  AND  FOR  OTHER  PURPOSES 


AS  PASSED  BY  THE  SENATE 


AND 


AS  PASSED  BY  THE  HOUSE  OF  REPRESENTATIVES 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

ISIS 


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SUBMITTED  BY  MR.  HOLLIS. 


In  the  Senate  of  the  United  States, 

May  16  ( calendar  day,  May  17),  1916. 

On lent,  That  there  be  printed  as  a Senate  Document, 
bill  (S.  2986)  “To  provide  capital  for  agricultural  devo  cT™en  , & market  for  United  states  bonds, 

upon  farm  mortgage,  to  equalize  rates  of  m er®9  tQ  create  Government  depositaries  and  financial  agents 

Stw S^“ ' ICS”  sliowing  the  bill  as  passed  by  the  Senate  and  the  bill  as  passed 
by  the  House  of  Representatives. 

Attest:  James  M.  Bakek, 

• Secretary. 


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RURAL  CREDITS  BILL. 


bU^,^ 

for  IheSn’vestment  of  postal  savings  deposits,  to  create  Government  depositaries  and  financial  agents  for  e 
United  States,  and  for  other  purposes. 


AS  PASSED  BY  SENATE. 

lie  it  enacted  by  the  Senate  and 
House  of  Representatives  of  the 
United  States  of  America  in  Congress 
assembled , That  the  short  title  of 
this  Act  shall  be  “The  Federal  farm 
loan  Act.”  Its  administration  shall 
be  under  the  direction  and  control 
of  the  Federal  Farm  Loan  Board 
hereinafter  created. 


AS  PASSED  BY  HOUSE. 

Be  it  enacted  by  the  Senate  and. 
House  of  Representatives  of  the 
United  States  of  America  in  Congress 
assembled,  That  the  short  title  of 
this  Act  shall  be  “The  Federal  farm 
loan  Act.”  Its  administration  shall 
be  under  the  direction  and  control 
of  the  Federal  Farm  Loan  Board 
hereinafter  created. 


DEFINITIONS. 

Sec.  2.  That  wherever  the  term 
“first  mortgage”  is  used  in  this  Act 
it  shall  be  held  to  include  such 
classes  of  first  liens  on  farm  lands 
as  shall  be  approved  by  the  Federal 
Farm  Loan  Board,  and  the  credit 
instruments  secured  thereby.  The 
term  “farm  loan  bonds”  shall  be 
held  to  include  all  bonds  secured  by 
collateral  deposited  with  a farm  loan 
registrar  under  the  terms  of  this  Act ) 

they 

shall  be  distinguished  by  the  addi- 
tion of  the  words 

‘ 1 limited, ’ ’ ‘ ‘ unlimited , ’ ’ 

or  “joint  stock,”  as  the  case  may  be. 

FEDERAL  FARM  LOAN  BOARD. 

Sec.  3.  That  there  shall  be  estab- 
lished at  the  seat  of  government 

in  the  Department  of  the  Treasury 
a bureau 

charged  with  the  execution  of  this 
Act  and  of  all  Acts  amendatory 
thereof, 


DEFINITIONS. 

Sec.  2.  That  wherever  the  term 
“first  mortgage”  is  used  in  this  Act 
it  shall  be  held  to  include  such 
classes  of  first  liens  on  farm  lands 
as  shall  be  approved  by  the  Federal 
Farm  Loan  Board,  and  the  credit 
instruments  secured  thereby.  The 
term  “farm  loan  bonds”  shall  be 
held  to  include  all  bonds  secured  by 
collateral  deposited  with  a farm  loan 
registrar  under  the  terms  of  this  Act ; 

and  such  bonds 

shall  be  distinguished  by  the  addi- 
tion of  the  words 

“Federal,” 

or  “joint  stock,”  as  the  case  may  be. 

FEDERAL  FARM  LOAN  BOARD. 

Sec.  3.  That  there  shall  be  estab- 
lished at  the  seat  of  government 

a Federal  Farm  Loan  Board,  which 
shall  be 

charged  with  the  execution  of  this 
Act  and  of  all  Acts  amendatory 
thereof. 


to  be  known  as  the  Federal  Farm 
Loan  Bureau,  under  the  general 
supervision  of  a Federal  Farm  Loan 
Board 


Said 


The 


3 


rural  credits  bill. 


4 


AS  PASSED  BY  SENATE. 

Federal  Farm  Loan  Board  shall  con- 
sist of 

five 

members, 

including  the  Secretary  of  the  Treas- 
ury, 

who  shall 

be  a member  ex  officio,  and  four 
members  to 

be  appointed  by  the  President  of 
the  United  States,  by  and  with  the 
advice  and  consent  of  the  Senate. 

Of  the  four  members  to  be  appointed 
by  the  President, 

not  more  than  two 

shall  be  appointed  from  one  political 
party 

and  all  four  of  said  members 

shall  be  citizens  of  the  United  States 
and  shall  devote  their  entire  time  to 
the  business  of  the  F ederal  F arm 
Loan  Board 

; they 

shall 

receive  an  annual  salary  of 

$10,000 

payable  monthly,  together  with 
actual  necessary  traveling  expenses. 

Olio 

of  the  members  to  be  appointed 

by  the  President 
shall  be  designated  by  him 
to  serve  for 
two 
years, 

one  for  four  years, 


AS  PASSED  BY  HOUSE. 

Federal  Farm  Loan  Board  shall  con- 
sist of 

throe 

members, 

who  shall 

be  appointed  by  the  President  of 
the  United  States,  by  and  with  the 
advice  and  consent  of  the  Senate. 

Not  more  than  two 
of  said  members 

shall  be  appointed  from  one  political 
party  ■ 

. They 

shall  be  citizens  of  the  United  States 
and  shall  devote  their  entire  tune  to 
the  business  of  the  Federal  Farm 
Loan  Board 

and 

shall 

each 

receive  an  annual  salary  of 
$7,500, 

payable  monthly,  together  with 
actual  necessary  traveling  expenses. 

One 

member  of  said  board  shall  be  desig- 
nated 

by  the  President 

to  serve  for 
three 


years 


' 


Digitized  by  the  Internet  Archive 

in  2016 


https://archive.org/details/ruralcreditsbillOOunit 


r 


rural  credits  bill. 


AS  PASSED  BY  SENATE, 
ono  for  six  years,  and  one  for 

oight 

years,  and  thereafter  each  member 
so  appointed  shall  sorvo  for  a torm 
of 

eight 

years,  unless  sooner  removed  for 
cause  by  the  President.  One  of 
the  members  shall  be  designated  by 
the  President  as  the  Farm  Loan 
Commissioner,  who  shall  be  the 
chairman  and  the  active  evecutive 
officer  of  said  board.  Each  mem- 
ber of  the  Federal  Farm  Loan 
Board  shall  within  fifteen  days 
after  notice  of  his  appointment 
take  and  subscribe  to  the  oath  oi 

The  first  meeting  of  the  Federal 
Farm  Loan  Board  shall  be  held  in 
Washington  as  soon  as  may  be 
after  the  passage  of  this  Act,  at  a 
date  and  place  to  he  fixed  by  the 

Secretary  of  the  Treasury 

No  member  of  the  Federal  Farm 
Loan  Board  shall 


be  an  officer  or  director  of  any 


AS  PASSED  BY  HOUSE, 
one  for  six  years,  and  one  for 

nino 

years,  and  thereafter  oach  member 
so  appointed  shall  serve  for  a term 
of 

nine 

years,  unless  sooner  removod  for 
cause  by  the  President.  One  of 
the  members  shall  be  designated  by 
the  President  as  the  Farm  Loan 
Commissioner,  who  shall  he  the 
chairman  and  the  active  executive 
officer  of  said  board.  Each  mem- 
ber of  the  Federal  Farm  Loan 
Board  shall  within  fifteen  days 
after  notice  of  his  appointment 
take  and  subscribe  to  the  oath  of 

The  first  meeting  of  the  Federal 
Farm  Loan  Board  shall  be  held  in 
Washington  as  soon  as  may  be 
after  the  passage  of  this  Act,  at  a 
date  and  place  to  he  fixed  by  the 

chairman  of  said  board. 

No  member  of  the  Federal  Farm 
Loan  Board  shall 

, during  his  continuance  in  office, 

be  an  officer  or  director  of  any 

other 


institution,  association,  or  partner- 
ship engaged  in  banking 


Before  entering  upon  his  duties  as 
a member  of  the  Federal  Farm 
Loan  Board,  each  member  shall 
certify  under  oath  to  the  President 
that  he  is  eligible  under  this  sec- 
tion. 

The  President  shall  have  the 
power,  by  and  with  the  advice  and 
consent  of  the  Senate,  to  fill  any 
vacancy  occurring  in  the  member- 
ship of  the  Federal  Farm  Loan 
Board ; if  such  vacancy  shall  be 
filled  during  the  recess  of  the 
Senate  a commission  shall  be  grant- 
ed which  shall  expire 

thirty  days  after  the  Senate  con- 
venes 


institution,  association,  or  partner- 
ship engaged  in  banking 

, or  in  the  business  of  making  land- 
mortgage  loans  or  selling  land 
mortgages. 

Before  entering  upon  his  duties  as 
a member  of  the  Federal  1 arm 
Loan  Board  each  member  shall 
certify  under  oath  to  the  President 
that  he  is  eligible  under  this  sec- 
tion. , 

The  President  shall  have  the 
power,  by  and  with  the  advice  and 
consent  of  the  Senate,  to  fill  any 
vacancy  occurring  in  the  member- 
ship of  the  Federal  Farm  Loan 
Board;  if  such  vacancy  shall  he 
filled  during  the  recess  of  the 
Senate  a commission  shall  be  grant- 
ed which  shall  expire 

at  the  end  of  their  next  session. 


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rural  credits  bill. 


AS  PASSED  BY  SENATE. 

The  Federal  Farm  Loan  Board 
shall  appoint  a farm  loan  registrar 
in  each  land  bank  district  to  re- 
ceive applications  for  issuos  ol 
farm  loan  bonds  and  to  perform 
such  other  services  as  are  prescribed 
by  this  Act.  It  shall  also  appoint 
one  or  more 

land  bank 

appraisers  for  each  land  bank  dis- 
trict and  as  many 

special  appraisers 

as  it  shall  deem  necessary.  Farm 
loan  registrars. 

land  bank 

appraisers,  and 

special  appraisers 

appointed  under  this  section,  shall 
be  public  officials  and  shall 


have  no  connection  with  or  interest 
in  any 


institution,  association,  or  partner- 
ship engaged  in  banking 


The  salaries  and  expenses  of  the 
Federal  Farm  Loan  Board,  and  of 
farm  loan  registrars  and 

special  appraisers 

authorized  under  this  section,  shall 
bo  paid 

out  of  any  moneys  in  the  Treasury 
of 

the  United  States 

not  otherwise  appropriated. 

Land  bank  appraisers 

shall  receive  such  compensation  as 
the  Federal  Farm  Loan  Board 
shall  fix,  and  shall  be  paid  by  the 


AS  PASSED  BY  HOUSE. 

The  Federal  Farm  Loan  Board 
shall  appoint  a farm  loan  registrai 
in  each  land  hank  district  to  re- 
ceive applications  for  issues  oi 
farm  loan  bonds  and  to  perform 
such  other  servicos  as  are  prescribed 
by  this  Act.  It  shall  also  appoint 
one  or  more 


appraisers  for  each  land  bank  dis- 
trict and  as  many 

examiners 

as  it  shall  deem  necessary.  Farm 
loan  registrars. 


appraisers,  and 
examiners 

appointed  under  this  section  shall 
be  pub  he  officials  and  shall 

, during  their  continuance  in  office, 

have  no  connection  with  or  interest 
in  any 

other 

institution,  association,  or  partner- 
ship engaged  in  banking 

or  in  the  business  of  making  land- 
mortgage  loans  or  selling  land 
mortgages:  Provided,  That  this  limi- 
tation shall  not  apply  to  persons 
employed  by  the  board  temporarily 
to  do  special  work. 

The  salaries  and  expenses  of  the 
Federal  Farm  Loan  Board,  and  of 
farm  loan  registrars  and 

examiners 

authorized  under  this  section,  shall 
be  paid 

by 

the  United  States. 


Appraisers 

shall  receive  such  compensation  as 
the  Federal  Farm  Loan  Board 
shall  fix,  and  shall  be  paid  by  the 


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rural  credits  bill. 


7 


AS  PASSED  BY  SENATE. 

Federal  land  banks  and  the  joint 
stock  land  banks 


which  they  serve,  in  such  propor- 
tion and  in  such  manner  as  the 
Federal  Farm  Loan  Board  shall 
order. 

The  Federal  Farm  Loan  Board 
shall  be  authorized  and  empowered 
to  employ  such  attorneys,  experts 
assistants,  clerks,  laborers,  and 
other  employees  as  it  may  deem 
necessary  to  conduct  the  business 
of  said  board.  All  salaries  and  fees 
authorized  in  this  section  and  not 
otherwise  provided  for,  shall  be 
fixed  in  advance  by  said  board  and 
shall  be  paid  in  the  same  manner 
as  the  salaries  of  the  Federal  Farm 
Loan  Board.  All  such  attorneys, 
experts,  assistants,  clerks,  laborers, 
and  other  employees,  and  all  regis- 
trars 


and  appraisers,  shall  be  appointed 
without  regard  to  the  provisions  of 
the  Act  of  January  sixteenth,  eight- 
een hundred  and  eighty-three  (vol- 
ume twenty- two,  United  States 
Statutes  at 'Large,  page  four  hun- 
dred and  three),  and  amendments 
thereto,  or  any  rule  or  regulation 
made  in  pursuance  thereof:  Pro- 
vided, That  nothing  herein  shall 
prevent  the  President  from  placing 
said 

employees 

in  the  classified  service. 

Every  Federal  land  bank  shall 
semiannually  submit  to  the  1 ederal 
Farm  Loan  Board  a schedule  show- 
ing the  salaries  or  rates  of  compen- 
sation paid  to  its  officers  and  em- 
ployees, and  said  board  shall  ha\  e 
power  to  disapprove  such  schedule, 
or  any  item  in  it,  and  to  alter  any 
or  all  salaries  therein  shown. 

The  Federal  Farm  Loan  Board 
shall  annually  make  a full  report 
of  its  operations  to  the  Speaker  of 
the  House  of  Representatives,  who 
shall  cause  the  same  to  be  printed 
for  the  information  of  the  Congress. 

The  Federal  Farm  Loan  Board 
shall  from  time  to  time  require 
examinations  and  reports  of  condi- 
tion of  all 


AS  PASSED  BY  HOUSE. 

Federal  land  banks  and  the  joint 
stock  land  banks 

, created  under  this  Act, 

which  they  serve,  in  such  propor- 
tion and  in  such  manner  as  the 
Federal  Farm  Loan  Board  shall 
order. 

The  Federal  Farm  Loan  Board 
shall  be  authorized  and  empowered 
to  employ  such  attorneys,  experts, 
assistants,  clerks,  laborers,  and 
other  employees  as  it  may  deem 
necessary  to  conduct  the  business 
of  said  board.  All  salaries  and  fees 
authorized  in  this  section  and  not 
otherwise  provided  for  shall  be 
fixed  in  advance  by  said  board  and 
shall  be  paid  in  the  same  manner 
as  the'  salaries  of  the  F ederal  l1  arm 
Loan  Board.  All  such  attorneys, 
experts,  assistants,  clerks,  laborers, 
and  other  employees,  and  all  regis- 
trars 

, examiners, 

and  appraisers  shall  be  appointee! 
without  regard  to  the  provisions  of 
the  Act  of  January  sixteenth,  eight- 
een hundred  and  eighty-three  (vol- 
ume twenty-two,  Lnited  States 
Statutes  at  Large,  page  four  hun- 
dred and  three),  and  amendments 
thereto,  or  any  rule  or  regulation 
made  in  pursuance  thereof:  Pro- 
vided, That  nothing  herein  shah 
prevent  the  President  from  placing 
said 

positions 

in  the  classified  service. 


The  Federal  Farm  Loan  Board 
shall  from  time  to  time  require 
examinations  and  reports  of  conui- 
tion  of  all 


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RURAL  CREDITS  BILL. 


AS  PASSED  BY  SENATE, 
associations  and 

hanks  established  under  the  provi- 
sions of  this  Act,  and  shall  publish 
consolidated  statements  of  the  re- 
sults thereof.  It  shall  cause  to  be 
made  appraisals  of  farm  lands  as 
provided  by  this  Act,  and  shall  pre- 
pare and  publish  amortization  tables 
which  shall  be  used  by 


associations  and 


banks 

under  its  supervision. 

It  shall  by  suitable  rules  and  regu- 
lations require  all  offenses  and  de- 
linquencies under  this  Act  to  be 
forthwith  reported  to  it  and  to  the 
United  States  district  attorney  for 
the  district  in  which  any  such 
offense  ’or  delinquency  shall  occur, 
and  shall  institute  immediate  pro- 
ceedings in  the  proper  court  for  the 
prosecution  of  any  person  commit- 
ting an  offense  under  any  provision 
of  this  Act. 

The  Federal  Farm  Loan  Board 
shall  prescribe  a form  for  the.  state- 
ment of  condition  of 


associations  and 


banks  under  its  supervision,  which 
shall  be  filled  out  quarterly  by  each 
such  association  or  bank  anti  trans- 
mitted to  said  board. 

It  shall  be  the  duty  of  the  Federal 
Farm  Loan  Board  to  prepare  from 
time  to  time  bulletins  setting  forth 
the  principal  features  of  this  Act 
and  to  distribute  the  same,  particu- 
larly to  the  press,  to  agricultural 
journals,  and  to  farmers’  organiza- 
tions; to  prepare  and  distribute  in 
the  same  manner  circulars  setting 
forth  the  principles  and  advantages 
of  amortized  farm  loans  and  the 
protection  afforded  debtors  under 
this  Act,  instructing  farmers  how 
to  organize  and  conduct  farm  loan 
associations,  and  advising  investors 
of  the  merits  and  advantages  of 
farm  loan  bonds;  and  to  dissemi- 
nate in  its  discretion  information 


AS  PASSED  BY  HOUSE. 

land 

banks  established  under  the  provi- 
sions of  this  Act,  and  shall  publish 
consolidated  statements  of  the  Je- 
suits thereof.  It  shall  cause  to  be 
made  appraisals  of  farm  lands  as 
provided  by  this  Act,  and  shall  pi  e- 
pare  and  publish  amortization  tables 
which  shall  be  used  by 

national  farm  loan 

associations  and 

land 

banks 

organized  under  this  Act. 


The  Federal  Farm  Loan  Board 
shall  prescribe  a form  for  the  state- 
ment of  condition  of 

national  farm  loan 

associations  and 

land 

banks  under  its  supervision,  which 
shall  be  filled  out  quarterly  by  each 
such  association  or  bank  and  trans- 
mitted to  said  board. 


' 


■ 

. 


v 


■ 


' 


RURAL  CREDITS  BILL. 


9 


AS  PASSED  BY  SENATE. 

for  the  further  instruction  of  farmers 
regarding  the  methods  and  princi- 
ples of  cooperative  credit  and  organ- 
ization. Said  Farm  Loan  Board  is 
hereby  authorized  to  use  a reason- 
able portion  of  tho  organization 
fund  provided  in  section  thirty-six 
of  this  Act  for  the  objects  specified 
in  this  paragraph,  and  is  instructed 
to  lay  before  the  Congress  at  each 
session  its  recommendations  for  fur- 
ther appropriations  to  oarry  out  said 
objects. 

POWERS  OF  FEDERAL  FARM  LOAN 
BOARD. 

This  section  number  20  in  the  Senate  bill  will  be 
found  on  page  52.  For  cross  reference  and  comparison 
only  it  is  inserted  here. 

Sec.  20.  That  the  Federal  Farm 
Loan  Board  shall  have  'power — ■ 

(a)  To  organize  and  charter  Fed- 
eral land  banks, 


national  farm  loan  associations,  and 
joint  stock  land  banks 


subject  to  the  provisions  of  this  Act, 

and  in  its  discretion  to  authorize 
them  to  increase  their  capital  stock. 

(Jb)  To  review  and  alter  at  its 
discretion  the  rate  of  interest  to  be 
charged  by  Federal  land  banks  for 
loans  made  by  them  under  the  pro- 
visions of  this  Act,  said  rates  to  be 
uniform  so  far  as  practicable. 

(c)  To  grant  or  refuse  to  Federal 
land  banks,  or  joint  stock  land 
banks,  authority  to  make  any 
specific  issue  of  farm  loan  bonds. 

(fit)  To  make  rules  and  regula- 
tions respecting  the  charges  made 
to  borrowers  on  loans  under  this 
Act  for  expenses  in  appraisal,  ex- 
amining 

title, 

drawing  legal  papers,  recording, 

and  similar  services. 

(e)  To  require  reports  and  state- 
ments of  condition  and  to  make  ex- 
aminations of  all  banks  or  associ- 
ations doing  business  under  the 
provisions  of  this  Act. 

(f)  To  prescribe  the  form  and 
terms  of  farm  loan  bonds,  and  the 
form,  terms,  and  penal  sums  of  all 


AS  PASSED  BY  HOUSE. 


POWERS  OF  FEDERAL  FARM  LOAN 
BOARD. 


Sec.  4.  That  the  Federal  Farm 
Loan  Board  shall  have  power — 

(a)  To  organize  and  charter  Fed- 
eral land  banks, 

and  to  charter 

national  farm  loan  associations,  and 
joint  stock  land  banks, 

as  hereinafter  defined, 

subject  to  the  provisions  of  this  Act. 


(b)  To  review  and  alter  at  its  dis- 
cretion the  rate  of  interest  to  be 
charged  by  Federal  land  banks  for 
loans  made  by  them  under  the  pro- 
visions of  this  Act,  said  rates  to 
be  uniform  so  far  as  practicable. 

(c)  To  grant  or  refuse  to  Federal 
land  banks,  or  joint  stock  land 
banks,  authority  to  make  any  spe- 
cific issue  of  farm  loan  bonds. 

(d)  To  make  rules  and  regulations 
respecting  the  charges  made  to  bor- 
rowers on  loans  under  this  Act  for 
expenses  in  appraisal,  determina- 
tion of  title,  and  recording. 


(e)  To  prescribe  the  form  and 
terms  of  farm  loan  bonds,  and  the 
form,  terms,  and  penal  sum  of  all 


42564— S.  Doc.  444,  64-1 2 


)* 

, 

■ > I/''..-  I ..  . ..  . 


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. 


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. 


. 


. 


. 


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. 


i s 


RURAL  CREDITS  BILL. 


10 


AS  PASSED  BY  SENATE. 

surety  bonds  required  under  this 
Act  and  of  such  other  surety  bonds 
as  they  shall  deem  necessary , such 
surety  bonds  to  cover  financial  loss 
as  well  as  faithful  performance  of 
duty. 

( g ) To  require  Federal  land  banks 
to  pay  forthwith  to  any  Federal 
land  bank  their  equitable  propor- 
tion of  any  sums  advanced  by  said 
land  bank  to  pay  the  coupons  of  any 
other  land  bank,  basing  said  required 

>ayments  on  the  amount  oj  farm 
oans  issued  by  each  land  bank  and 
actually  outstanding  at  the  time  of 
such  requirement. 

(h)  To  exercise  general  super- 
visory authority  over  the  Federal 
land  banks,  the  national  farm  loan 
associations,  and  the  joint  stock 
land  banks  herein  provided  for. 


AS  PASSED  BY  HOUSE. 

surety  bonds  required  under  this 
Act  and  of  such  other  surety  bonds 
as  thoy  shall  deem  necessary,  such 
surety  bonds  to  cover  financial  loss 
as  well  as  faithful  performance  of 
duty. 


(f)  To  suspend  or  to  remove  for 
cause  any  district  director  or  any 
registrar,"  appraiser,  examiner,  or 
other  official  appointed  by  said 
board  under  authority  of  section 
three  of  this  Act;  the  cause  of  such 
suspension  or  removal  to  be  com- 
municated forthwith  in  writing  by 
the  Federal  Farm  Loan  Board  to 
the  person  suspended  or  removed, 
and  in  case  of  a district  director  to 
the  proper  farm  land  bank. 

(g)  To  make  application  to  the 
Secretary  of  the  Treasury  for  tem- 
porary deposits,  as  follows: 

If  at  any  time  a Federal  land 
bank,  the  fair  value  of  whose  assets 
is  at'  least  equal  to  the  total  of  its 
liabilities,  shall  find  that  it  may 
soon  be  without  funds,  immediately 
available,  sufficient  to  meet  its  obli- 
gations with  respect  to  the  payment  , 
when  required,  of  the  principal  of 
or  the  interest  on  bonds  issued  under 
this  Act,  or  of  both  principal  and 
interest,  it  may  make  application  to 
the  Federal  Farm  Loan  Board  for  a 
temporary  deposit  by  the  Secretary 
of  the  Treasury  of  the  sum  needed 
to  make  such  payment  during  the 
period  for  which  its  funds,  immedi- 
ately available,  will  be  insufficient, 
setting  forth  in  its  application  such 
information  as  the  Federal  Farm 
Loan  Board  may  require.  If  after 
investigation  the  Federal  Farm 
Loan  Board  approves  said  applica- 
tion it  shall  give  notice  thereof  to 
the  Secretary  of  the  Treasury,  stat- 
ing the  sum  required,  the  period  for 
which  needed,  and  such  other  facts 
as  may  be  necessary.  Thereupon 
the  Secretary  of  the  Treasury  may 
deposit  such  sum,  or  from  time  to 
time  so  much  thereof  as  may  be  re- 


. 


. 


■ 

. 


' 

■ , 

* 

■ 


■ 


' 


. 


RURAL  CREDITS  BILL. 


AS  PASSED  BY  SENATE. 


(i)  To  exercise  such  incidental 
powers  as  shall  he  necessary  or 
requisite  to  fulfill  their  duties  and 
carry  out  the  purposes  of  this  Act. 

FEDERAL  LAND  BANKS. 

Sec.  4. 

That  as  soon  as  practicable  the 
Federal  Farm  Loan  Board  shall 
divide  the  continental  United 
States,  excluding  Alaska,  into 
twelve  districts,  which  shall  be 
known  as  Federal  land  bank  dis- 
tricts, and  may  be  designated  by 
number.  Said  districts  shall  be 
apportioned  with  due  regard  to  the 
farm  loan  needs  of  the  country,  but 
no  such  district  shall  contain  a 
fractional  part  of  any  State. 

They 

may  be  readjusted  from  time  to 
time 

and  their  number  may  be  increased 
by  the  Federal  Farm  Loan  Board: 
Provided,  That 

in 

no  case  shall  a Federal  land  bank 
be  established  with  less  than 

$500,000 

capital  stock. 


AS  PASSED  BY  HOUSE. 

quired,  with  said  Federal  land  bank, 
to  be  expended  under  the  direction 
of  the  Federal  Farm  Loan  Board  for 
the  purposesjfor  which  the  applica- 
tion for  such  deposit  was  approved. 
Any^sumfso  deposited  shall  hear  a 
rate^of  interest  fixed  by  the  Secre- 
tary of  the  Treasury,  not  to  exceed 
the  current  rate  charged  for  other 
Government  deposits,  and  shall  be 
repaid  as  may  be  required,  but  not 
later  than  the  expiration  of  the 
period  fixed  by  the  Secretary  of  the 
Treasury.  To  secure  the  repay- 
ment of  any  such  deposit,  together 
with  the  payment  of  the  interest 
thereon,  said  Federal  land  bank 
shall  issue  to  the  Secretary  of  the 
Treasury  its  certificate  of  indebted- 
ness: Provided,  That  the  aggregate 
of  all  such  deposits  in  any  one 
Federal  land  bank  by  the  Secretary 
of  the  Treasury  shall  not  exceed,  in 
any  fiscal  year  or  at  one  time,  the 
sum  of  $500,000. 

(h)  To  exercise  such  incidental 
powers  as  shall  be  necessary  or 
requisite  to  fulfill  their  duties  and 
carry  out  the  purposes  of  this  Act. 

FEDERAL  LAND  BANKS. 

Sec.  5. 

That  as  soon  as  practicable  the 
Federal  Farm  Loan  Board  shall 
divide  the  continental  United 
States,  excluding  Alaska,  into 
twelve  districts,  which  shall  be 
known  as  Federal  land  bank  dis- 
tricts, and  may  be  designated  by 
number.  Said  districts  shall  be 
apportioned  with  due  regard  to  the 
farm  loan  needs  of  the  country,  but 
no  such  district  shall  contain  a 
fractional  part  of  any  State. 

Said  districts 

may  be  readjusted  from  time  to 
time. 


In 

no  case  shall  a Federal  land  bank 
be  established  with  less  than 

$750,000 

capital  stock. 


RURAL  CREDITS  BILL. 


12 


AS  PASSED  BY  SENATE. 

The  Federal  Farm  Loan  Board 
shall  establish  in  each  Federal  land 
bank  district  a Federal  land  bank, 
with  its  principal  office  located  in 
such  city  within  the  district  as  said 
board  shall  designate.  Each 


land  bank  shall  include  in  its  title 
the  name  of  the  city  in  which  it  is 
located.  Subject  to  the  approval 
of  the  Federal  Farm  Loan  Board, 
any  Federal  land  bank  may  estab- 
lish branches  within  the  land  bank 
district. 

Each  Federal  land  bank  shall  be 
temporarily  managed  by 

five 

directors  appointed  by  the  Federal 
Farm  Loan  Board.  Said  directors 
shall  be  citizens  of  the  United  States 
and  residents  of  the  district.  They 
shall  each  give  a surety  bond,  the 
premium  on  which  shall  be  paid 
from  the  funds  of  the  bank.  They 
shall  receive  such  compensation  as 
the  Federal  Farm  Loan  Board  shall 
fix.  They  shall  choose  from  their 
number,  by  majority  vote,  a presi- 
dent, a vice  president, 


a secretary, 
and  a 

treasurer.  They  are  further  au- 
thorized and  empowered  to  employ 
such  attorneys,  experts,  assistants, 
clerks,  laborers,  and  other  employ- 
ees as  they  may  deem  necessary,  and 
to  fix  their  compensation,  subject  to 
the  approval  of  the  Federal  harm 
Loan  Board. 

Said  temporary  directors  shall, 
under  their  hands,  forthwith  make 
an  organization  certificate,  which 
shall  specifically  state: 

First.  The  name  assumed  by 
such  bank. 

Second.  The  district  within  which 
its  operations  are  to  be  carried  on, 
and  the  particular  city  in  which  its 
principal  office  is  to  be  located. 

Third.  The  amount  of  capital 
stock  and  the  number  of  shares  into 
which  the  same  is  to  be  divided. 


AS  PASSED  BY  HOUSE. 

The  Federal  Farm  Loan  Board 
shall  establish  in  each  Federal  land 
bank  district  a Federal  land  bank, 
with  its  principal  office  located  in 
such  city  within  the  district  as  said 
board  shall  designate.  Each 

Federal 

land  bank  shall  include  in  its  title 
the  name  of  the  city  in  which  it  is 
located.  Subject  to  the  approval 
of  the  Federal  Farm  Loan  Board, 
any  Federal  land  bank  may  estab- 
lish branches  within  the  land  bank 
district. 

Each  Federal  land  bank  shall  be 
temporarily  managed  by 

three 

directors  appointed  by  the  Federal 
Farm  Loan  Board.  Said  directors 
shall  be  citizens  of  the  United  States 
and  residents  of  the  district.  They 
shall  each  give  a surety  bond,  the 
premium  on  which  shall  be  paid 
from  the  funds  of  the  bank.  They 
shall  receive  such  compensation  as 
the  Federal  Farm  Loan  Board  shall 
fix.  They  shall  choose  from  their 
number,  by  majority  vote,  a presi- 
dent, a vice  president, 

and 

a secretary, 

who  shall  also  act  as 

treasurer.  They  are  further  au- 
thorized and  empowered  to  employ 
such  attorneys,  experts,  assistants, 
clerks,  laborers,  and  other  employ- 
ees as  they  may  deem  necessary  and 
to  fix  their  compensation,  subject  to 
the  approval  of  the  Federal  Farm 
Loan  Board. 

Said  temporary  directors  shall, 
under  their  hands,  forthwith  make 
an  organization  certificate,  which 
shall  specifically  state: 

First.  The  name  assumed  by 
such  bank. 

Second.  The  district  within  which 
its  operations  are  to  be  carried  on, 
and  the  particular  city  in  which  its 
principal  office  is  to  be  located. 

Third.  The  amount  of  capital 
stock  and  the  number  of  shares  into 
which  the  same  is  to  be  divided. 

: Provided,  That  every  Federal  land 
bank  organized  under  this  Act  shall 
by  its  articles  of  association  permit 
an  increase  of  its  capital  stock  from 


n i - 


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RURAL  CREDITS  BILL. 


13 


AS  PASSED  BY  SENATE. 


Fourth.  The  fact  that  the  certifi- 
cate is  made  to  enable  such  persons 
to  avail  themselves  of  the  advan- 
tages of  this  Act. 

The  organization  certificate  shall 
be  acknowledged  before  a judge 


of  some  court  of  record  or  notary 
public,  and 

shall  be, 

together  with  the  acknowledgment 
thereof,  authenticated  by  the  seal 
of  such  court  or  notary, 


transmitted  to  the  Farm  Loan  Com- 
missioner, who  shall  record  and  care- 
fully preserve  the  same  in  his  office, 
where  it  shall  be  at  all  times  open 
to  public  inspection. 

The  Federal  Farm  Loan  Board  is 
authorized  to  direct  such  changes 
in  or  additions  to  any  such  organ- 
ization certificate 


as  it  may  deem  necessary  or  expe- 
dient. 

Upon  duly  making  and  filing  such 
organization  certificate  the  bank 
shall  become,  as  from  the  date  of  the 
execution  of  its  organization  certifi- 
cate, a body  corporate,  and  as  such, 
and  in  the  name  designated  in  the 
organization  certificate,  it  shall  have 
power — 

First.  To  adopt  and  use  a cor- 
porate seal. 

Second.  To  have  succession  until 
it  is  dissolved  by  Act  of  Congress  or 
under  the  provisions  of  this  Act. 

Third.  To  make  contracts. 

Fourth.  To  sue  and  be  sued,  com- 
plain 


and  defend,  in  any  court  of  law  or 
equity,  as  fully  as  natural  persons. 

Fifth.  To  elect  or  appoint  direct- 
ors, and  by  its  board  of  directors  to 


AS  PASSED  BY  HOUSE. 

time  to  time  for  the  purpose  of  pro- 
viding for  tho  issuo  of  shares  to 
national  farm  loan  associations  and 
stockholders  who  may  secure  loans 
through  agents  of  Federal  land 
banks  in  accordance  with  the  pro- 
visions of  this  Act. 

Fourth.  The  fact  that  the  certifi- 
cate is  made  to  enable  such  persons 
to  avail  themselves  of  the  advan- 
tages of  this  Act. 

The  organization  certificate  shall 
be  acknowledged  before  a judge 

or  clerk 

of  some  court  of  record  or  notary 
public,  and, 


together  with  the  acknowledgment 
thereof,  authenticated  by  the  seal 
of  such  court  or  notary, 

shall  be 

transmitted  to  the  Farm  Loan  Com- 
missioner, who  shall  record  and  care- 
fully preserve  the  same  in  his  office, 
where  it  shall  be  at  all  times  open 
to  public  inspection. 

The  Federal  Farm  Loan  Board  is 
authorized  to  direct  such  changes 
in  or  additions  to  any  such  organ- 
ization certificate 

, not  inconsistent  with  this  Act, 

as  it  may  deem  necessary  or  expe- 
dient. 

Upon  duly  making  and  filing  such 
organization  certificate  the  bank 
shall  become,  as  from  the  date  of  the 
execution  of  its  organization  certifi- 
cate, a body  corporate,  and  as  such, 
and  in  the  name  designated  in  the 
organization  certificate,  it  shall  have 
power — 

First.  To  adopt  and  use  a cor- 
porate seal. 

Second.  To  have  succession  until 
it  is  dissolved  by  Act  of  Congress  or 
under  the  provisions  of  this  Act. 
Third.  To  make  contracts. 
Fourth.  To  sue  and  be  sued,  com- 
plain 

, interplead, 

and  defend,  in  any  court  of  law  or 
equity,  as  fully  as  natural  persons. 

Fifth.  To  elect  or  appoint  direct- 
ors, and  by  its  board  of  directors  to 


* 


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■ 


. 1 

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' 

RURAL  CREDITS  BILL. 


14 


♦ 


AS  PASSED  BY  SENATE. 

olect  a president  and  a vice  presi- 
dent, appoint  a secretary  and  a 
treasurer  and  other  officers  and  em- 
ployees, define  their  duties,  require 
bonds  of  them  and  fix  the  penalty 
thereof;  by  action  of  its  board  of 
directors  dismiss  such  officers  and 
employees,  or  any  of  them,  at  pleas- 
ure and  appoint  others  to  fill  their 
places. 

Sixth.  To  prescribe,  by  its  board 
of  directors,  subject  to  the  supervi- 
sion and  regulation  of  the  Federal 
Farm  Loan  Board,  by-laws  not  in- 
consistent with  law,  regulating  the 
manner  in  which  its  stock  shall  be 
transferred,  its  directors  elected,  its 
officers  elected  or  appointed,  its 
property  transferred,  its  general 
business  conducted,  and  the  privi- 
leges granted  to  it.  by  law  exercised 
and  enjoyed. 

Seventh.  To  exercise,  by  its  board 
of  directors  or  duly  authorized  offi- 
cers or  agents,  subject  to  law,  all 
such  incidental  powers  as  shall  be 
necessary  to  carry  on  the  business 
herein  described. 


AS  PASSED  BY  HOUSE. 

elect  a president  andTa  vice  presi- 
dent, appoint  a secretary  and  a 
treasurer  and  other  officers  and  em- 
ployees, define  their  duties,  require 
bonds  of  them,  and  fix  the  penalty 
thereof;  by  action  of  its  board  of 
directors  dismiss  such  officers  and 
employees,  or  any  of  them,  at  pleas- 
ure and  appoint  others  to  fill  their 
places. 

Sixth.  To  prescribe,  by  its  board 
of  directors,  subject  to  the  supervi- 
sion and  regulation  of  the  Federal 
Farm  Loan  Board,  by-laws  not  in- 
consistent with  law,  regulating  the 
manner  in  which  its  stock  shall  be 
transferred,  its  directors  elected,  its 
officers  elected  or  appointed,  its 
property  transferred,  its  general 
business  conducted,  and  the  privi- 
leges granted  to  it  by  law  exercised 
and  enjoyed. 

Seventh.  To  exercise,  by  its  board 
of  directors  or  duly  authorized  offi- 
cers or  agents,  subject  to  law,  all 
such  incidental  powers  as  shall  be 
necessary  to  carry  on  the  business 
herein  described. 


After  the  subscriptions  to  stock 
in  any  Federal  land  bank  by  na- 
tional farm  loan  associations,  here- 
inafter 


After  the  subscriptions  to  stock 
in  any  Federal  land  bank  by  na- 
tional farm  loan  associations,  here- 
inafter 


authorized, 


created, 


shall  have  reached  the  sum  of 
$100,000,  the  officers 


shall  have  reached  the  sum  of 
$100,000,  the  officers 


and  directors 


of  said  land  bank  shall  be 
elected  and  appointed 


of  said  land  bank  shall  be 
chosen 


as 

hereinafter 

provided  and  shall,  upon  becoming 
duly  qualified,  take  over  the  man- 
agement of  said  land  bank  from  the 
temporary  officers 

appointed  and  chosen 

under  this  section. 

The  board  of  directors  of  every 
Federal  land  bank  shall  be  selected 
as  hereinafter  specified  and  shall 
consist  of 


as 

herein 

provided  and  shall,  upon  becoming 
duly  qualified,  take  over  the  man- 
agement of  said  land  bank  from  the 
temporary  officers 

selected 

under  this  section. 

The  board  of  directors  of  every 
Federal  land  bank  shall  be  selected 
as  hereinafter  specified  and  shall 
consist  of 


five 

members,  each  holding  office  for 
three  years. 


nine 

members,  each  holding  office  for 
three  years. 


* * 

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RURAL  CREDITS  BILL. 


15 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 


Three 

of  said  directors  shall  he  known  as 
local  directors,  and  shall  be  chosen 
by  and  be  representative  of  na- 
tional farm  loan  associations;  and 
the  remaining 

two 

directors  shall  be  known  as  district 
directors,  and  shall  be  appointed  by 
the  Federal  Farm  Loan  Board  and 
represent  the  public  interest. 

Farm  loan  associations  limited 
and  farm  loan  associations  unlim- 
ited shall,  respectively,  have  repre- 
sentation on  the  board  of  directors 
in  proportion  to  the  amoimt  of  un- 
paid principal  on  loans  made  to  their 
members  by  the  land  bank  and  ac- 
tually outstanding  three  months 
before  each  election.  If  the  amount 
unpaid  on  the  principal  of  loans 
outstanding  in  either  division  shall 
amount  to  less  than  $1,000,000,  all 
associations  in  the  district  shall 
vote  together  for  all  three  local 
directors. 


Two  months  before 
each  election 


the  farm  loan  commissioner  shall 

determine  the  proportional  repre- 
sentation of  each  division  as  herein 
prescribed,  and  shall  allot  to  each 
division  its  respective  proportion 
of  the  three  local  directors.  He 
shall  forthwith 

notify  each 


farm  loan  association  in  writing 
that  such  election  is  to  be  held, 
giving  the  number  of  directors  to 
be  elected 

by  each  division, 

and  requesting  each  association  to 
nominate  one  candidate  for  each 
director  to  be 

voted  for  in  its  division. 

Within  ten  days  of  the  receipt  of 
such  notice  each  association  shall 


Six 

of  said  directors  shall  be  known  as 
local  directors,  and  shall  be  chosen 
by  and  be  representative  of  na- 
tional farm  loan  associations;  ami 
the  remaining 

three 

directors  shall  be  known  as  district 
directors,  and  shall  be  appointed  by 
the  Federal  Farm  Loan  Board  and 
represent  the  public  interest. 


At  least 

two  months  before 

the  date  specified  by  the  Federal 
Farm  Loan  Board  for  the  first 
election 

the  Farm  Loan  Commissioner  shall 


notify  each 
national 

farm  loan  association  in  writing 
that  such  election  is  to  be  held, 
iving  the  number  of  directors  to 
e elected 

for  its  district, 

and  requesting  each  association  to 
nominate  one  candidate  for  each 
director  to  be 

elected. 

Within  ten  days  of  the  receipt  of 
such  notice  each  association  shall 


■ 


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. 


' 

' 

- 


■ 


■ 


■ 

. 


■ 


■ 


' ••  ■ 


‘ 


RURAL  CREDITS  BILL.  16 

AS  PASSED  BY  SENATE. 

AS  PASSED  BY  HOUSE. 

forward  its  nominations  to  said 
Farm  Loan  Commissioner.  Said 
commissioner  shall  prepare  a list  of 
candidates  for  local  directors, 

forward  its  nominations  to  said 
Farm  Loan  Commissioner.  Said 
commissioner  shall  prepare  a list  of 
candidates  for  local  directors 

the  ten 

consisting  of  the  twenty 

persons  receiving  the  highest  num- 
ber of  votes 

in  each  division 

persons  receiving  the  highest  num- 
ber of  votes 

from 

from 

national 


farm  loan  associations  making  such 
nominations 

farm  loan  associations  making  such 
nominations 

to  be  placed  on  the  list  for  such 
division. 

. At  least 

One 

one 

month  before  said  election  said 
Farm  Loan  Commissioner  shall  mail 
to  each 

month  before  said  election  said 
Farm  Loan  Commissioner  shall  mail 
to  each 

national  farm  loan 


association  the  list 

association  the  list 

for  its  division. 

of  candidates. 

The  directors  of  each 

The  directors  of  each 

national  farm  loan 


association  shall  cast  the  vote  of 
said  association  for  as  many  candi- 
dates on  said  list  as  there  are  va- 
cancies to  be  filled,  and  shall  for- 
ward said  vote  to  the  Farm  Loan 
Commissioner  within  ten  days  after 
said  list  of  candidates  is  received  by 
them.  The  candidates  receiving 
the  highest  number  of  votes 

from  associations  making  choice  in 
each  division, 

association  shall  cast  the  vote  of 
said  association  for  as  many  candi- 
dates on  said  list  as  there  are  va- 
cancies to  be  filled,  and  shall  for- 
ward said  vote  to  the  Farm  Loan 
Commissioner  within  ten  days  after 
said  list  of  candidates  is  received  by 
them.  The  candidates  receiving 
the  highest  number  of  votes 

shall  be  elected 
respectively 

shall  be  elected 

as  local  directors.  In  case  of  a tie 
the  Farm  Loan  Commissioner  shall 
determine  the  choice. 

as  local  directors.  In  case  of  a tie 
the  Farm  Loan  Commissioner  shall 
determine  the  choice. 

The  Federal  Farm  Loan  Board 
shall  designate  one  of  the  district 
directors  to  serve  for 

The  Federal  Farm  Loan  Board 
shall  designate  one  of  the  district 
directors  to  serve  for 

two 

three 

years  and  to  act  as  chairman  of  the 
board  of  directors. 

years  and  to  act  as  chairman  of  the 
board  of  directors. 

' 


: 


. 


■ 


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■ ■ ' 


- • 


RURAL  CREDITS  BILL. 


17 


AS  PASSED  BY  SENATE. 

The  other  district  director  shall 


serve  for  a term  of  one  year.  After 
the  first  appointments  each  di- 
rector 

district 

shall  he  appointed  for  a term  of 

two 

years. 

At  the  first  regular  meeting  of  the 
board  of  directors  of  each  Federal 
land  bank  it  shall  be  the  duty  of  the 
local  directors  to  designate 

one 

of  the  local  directors  whose  term  of 
office  shall  expire  in  one  year  from 
the  date  of  such  meeting, 

one 

whose  term  of  office  shall  expire  in 
two  years  from  said  date,  and 

one 

whose  term  of  office  shall  expire  in 
three  years  from  said  date. 

In  making  such  designations  an 
equitable  allotment  shall  be  made 
between  directors  chosen  in  the  two 
divisions  in  accordance  with  the 
proportional  representation  deter- 
mined by  the  farm  loan  commis- 
sioner. 

Thereafter  every  director  of  a Fed- 
eral land  bank  chosen  as  herein- 
before provided  shall  hold  office  for 
a term  of  three  years.  Vacancies 
that  may  occur  in  the  board  of 
directors  shall  be  filled 


in  the  manner  provided  for  the 
original  selection  of  such  directors. 

Directors  of  Federal  land  banks 
shall  have  been  for  at  least  two 
years  residents  of  the  district  for 
which  they  are  appointed  or  elected, 
and  at  least  one  district  director 
shall  be  experienced  in  practical 
farming  and  actually  engaged  at 
the  time  of  his  appointment  in 

42564— S.  Doc.  444,  64-1 3 


AS  PASSED  BY  HOUSE. 


It  shall  designate  one  of  said  di- 
rectors to  serve  for  a term  of  two 
years  and  one  to 

serve  for  a term  of  one  year.  After 
the  first  appointments  each  di- 
rector 


shall  be  appointed  for  a term  of 

three 

years. 

At  the  first  regular  meeting  of  the 
board  of  directors  of  each  Federal 
land  bank  it  shall  be  the  duty  of  the 
local  directors  to  designate 

two 

of  the  local  directors  whose  term  of 
office  shall  expire  in  one  year  from 
the  date  of  such  meeting, 

two 

whose  term  of  office  shall  expire  in 
two  years  from  said  date,  and 

two 

whose  term  of  office  shall  expire  in 
three  years  from  said  date. 


Thereafter  every  director  of  a Fed- 
eral land  bank  chosen  as  herein- 
before provided  shall  hold  office  for 
a term  of  three  years.  Vacancies 
that  may  occur  in  the  board  of 
directors  shall  be  filled 

for  the  unexpired  term 

in  the  manner  provided  for  the 
original  selection  of  such  directors. 

Directors  of  Federal  land  banks 
shall  have  been  for  at  least  two 
years  residents  of  the  district  for 
which  they  are  appointed  or  elected, 
and  at  least  one  district  director 
shall  bo  experienced  in  practical 
farming  and  actually  engaged  at 
the  time  of  his  appointment  in 


. 


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RURAL  CREDITS  BILL. 


18 


AS  PASSED  BY  SENATE. 

farming  operations  within  the  dis- 
trict. No  director  of  a Federal  land 
bank  shall 


act  as  an  officer,  director,  or  em- 
ployee of  any  other 

bank. 


Directors  of  Federal  land  banks 
shall  receive,  in  addition  to  any 
compensation  otherwise  provided, 
a reasonable  allowance  for  neces- 
sary expenses  in  attending  meet- 
ings of  their  respective  boards,  to 
be  paid  by  the  respective  Federal 
land  banks.  Any  compensation 
that  may  be  provided  by  boards  of 
directors  of  Federal  land  banks  for 
directors,  officers,  or  employees 
shall  be  subject  to  the  approval  of 
the  Federal  Farm  Loan  Board. 

CAPITAL  STOCK  OF  FEDERAL 
LAND  BANKS. 

Sec.  5. 

That  every  Federal  land  bank  shall 
have,  before  beginning  business,  a 
subscribed  capital  of  not  less  than 

$500,000. 

The  Federal  Farm  Loan  Board  is 
authorized  to  prescribe  the 

times  and 

conditions 


of  the  payment  of  subscriptions  to 
capital  stock,-  to  reject  any  sub- 
scription in  its  discretion,  and  to 
require  subscribers  to  furnish  ade- 
quate security  for  the  payment 
thereof. 

The  capital  stock  of  each  Federal 
land  bank  shall  be  divided  into 
shares  of  $5  each,  and  may  be  sub- 
scribed for  and  held  by  any  indi- 
vidual, firm,  or  corporation,  or  by 
the  Government  of  any  State  or  of 
the  United  States. 

Stock  held  by  national  farm  loan 
associations  shall  not  be  transferred 
or  hypothecated,  and  the  certifi- 
cates therefor  shall  so  state. 


AS  PASSED  BY  HOUSE. 

farming  operations  within  the  dis- 
trict. No  director  of  a Federal  land 
bank  shall 

, during  his  continuance  in  office, 

act  as  an  officer,  director,  or  em- 
ployee of  any  other 

institution,  association,  or  part- 
nership engaged  in  banking  or  in  the 
business  of  making  or  selling  land- 
mortgage  loans. 

Directors  of  Federal  land  banks 
shall  receive,  in  addition  to  any 
compensation  otherwise  provided, 
a reasonable  allowance  for  neces- 
sary expenses  in  attending  meet- 
ings of  theh  respective  boards,  to 
be  paid  by  the  respective  Federal 
land  banks.  Any  compensation 
that  may  be  provided  by  boards  of 
directors  of  Federal  land  banks  for 
directors,  officers,  or  employees 
shall  be  subject  to  the  approval  of 
the  Federal  Farm  Loan  Board. 

CAPITAL  STOCK  OF  FEDERAL 
LAND  BANKS. 

Sec.  6. 

That  every  Federal  land  bank  shall 
have,  before  beginning  business,  a 
subscribed  capital  of  not  less  than 

$750,000. 

The  Federal  Farm  Loan  Board  is 
authorized  to  prescribe  the 

terms, 

conditions 

, and  time 

of  the  payment  of  subscriptions  to 
capital  stock,  to  reject  any  sub- 
scription in  its  discretion,  and  to 
require  subscribers  to  furnish  ade- 
quate security  for  the  payment 
thereof. 

The  capital  stock  of  each  Federal 
land  bank  shall  be  divided  into 
shares  of  $5  each,  and  may  be  sub- 
scribed for  and  held  by  any  indi- 
vidual, firm,  or  corporation,  or  by 
the  Government  of  any  State  or  of 
the  United  States. 

Stock  held  by  national  farm  loan 
associations  shall  not  be  transferred 
or  hypothecated,  and  the  certifi- 
cates therefor  shall  so  state. 


' 


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RURAL  CREDITS  BILL. 


19 


AS  PASSED  BY  SENATE. 

Stock  owned  by  tho  Government 
of  the  United  States  in  Federal 
land  banks  shall  receive  no  divi- 
dends, but  all  other  stock  shall 
share  in  dividend  distributions  with- 
out preference.  Each 


farm  loan  association  and  tho  Gov- 
ernment of  the  United  States  shall 
bo  entitled  to  one  vote  for  each 
share  of  stock  held  by  it  in  deciding 
all  questions  at  meetings  of  share- 
holders, and  no  other  shareholder 
shall  be  permitted  to  vote.  Stock 
owned  by  the  United  States  shall 
be  voted  by  the  Farm  Loan  Com- 
missioner, as  directed  by  the  bed- 
eral  Farm  Loan  Board. 

It  shall  be  the  duty  of  the  Federal 
Farm  Loan  Board,  as  soon  as  prac- 
ticable after  the  passage  of  this  Act, 
to  open  books  of  subscription  for 
the  capital  stock  of  a Federal  land 
bank  in  each  Federal  land  bank 
district.  If  within  ninety  days  after 
the  opening  of  said  books  any  part 
of  the  minimum  capitalization  of 

$500,000 

herein  prescribed  for  Federal  land 
banks  shall  remain  unsubscribed,  it 
shall  be  the  duty  of  the  Secretary 
of  the  Treasury  to  subscribe  the 
balance  thereof  on  behalf  of  the 
United  States,  said  subscription  to 
be  subject  to  call  in  whole  or  in 
part  by  the  board  of  directors  of 
said  land  bank  upon  thirty  days’ 
notice 


AS  PASSED  BY  HOUSE. 

Stock  owned  by  tho  Government 
of  the  United  States  in  Federal 
land  banks  shall  receive  no  divi- 
dends, but  all  other  stock  shall 
share  in  dividend  distributions  with- 
out preference.  Each 

national 

farm  loan  association  and  the  Gov- 
ernment of  the  United  States  shall 
be  entitled  to  one  vote  for  each 
share  of  stock  held  by  it  in  deciding 
all  questions  at  meetings  of  share- 
holders, and  no  other  shareholder 
shall  be  permitted  to  vote.  Stock 
owned  by  the  United  States  shall 
be  voted  by  the  Farm  Loan  Com- 
missioner, as  directed  by  the  Fed- 
eral Farm  Loan  Board. 

It  shall  be  the  duty  of  the  Federal 
Farm  Loan  Board,  as  soon  as  prac- 
ticable after  the  passage  of  this  Act, 
to  open  books  of  subscription  for 
the  capital  stock  of  a Federal  land 
bank  in  each  Federal  land  bank 
district.  If  within  ninety  days  after 
the  opening  of  said  books  any  part 
of  the  minimum  capitalization  of 

$750,000 

herein  prescribed  for  Federal  land 
banks  shall  remain  unsubscribed,  it 
shall  be  the  duty  of  the  Secretary 
of  the  Treasury  to  subscribe  the 
balance  thereof  on  behalf  of  the 
United  States,  said  subscription  to 
be  subject  to  call  in  whole  or  in 
part  by  the  board  of  directors  of 
said  land  bank  upon  thirty  days’ 
notice 


with 

the  approval  of  the  Federal  Farm 
Loan  Board;  and  the  Secretary  of 
the  Treasury  is  hereby  authorized 
and  directed  to  take  out  shares  cor- 
responding to  the  unsubscribed  bal- 
ance as  called,  and  to  pay  for  the 
same  out  of  any  moneys  in  the 
Treasury  not  otherwise  appropri- 
ated. 


subject  to 

the  approval  of  the  Federal  Farm 
Loan  Board;  and  the  Secretary  of 
the  Treasury  is  hereby  authorized 
and  directed  to  take  out  shares  cor- 
responding to  the  unsubscribed  bal- 
ance as  called,  and  to  pay  for  the 
same  out  of  any  moneys  in  the 
Treasury  not  otherwise  appropri- 
ated. : 


Provided,  That  no  payments  from 
the  Secretary  of  the  Treasury  shall 
be  made  on  subscriptions  to  the 
stock  of  any  Federal  land  bank 
until  applications  for  loans  shall 
have  been  received  from  at  least 
ten  national  farm  loan  associations. 


After 


After 


the 


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RUBAL  CREDITS  BILL. 


20 


AS  PASSED  BY  SENATE. 

subscriptions  to  capital  stock, 

exclusive  of  Government  subscrip- 
tions, 

shall  amount  to 
$500,000 

in  any  Federal  land  bank,  said 
bank  shall  apply  semiannually  to 
the  payment  and  retirement  of 

stock  held  by  the  United  States, 
one-quarter 


of  all  sums  thereafter  subscribed  to 
capital  stock,  until  all 

stock  held  therein  by  the  United 
States 

is  retired  at  par. 


AS  PASSED  BY  HOUSE. 

subscriptions  to  capital  stock, 

by  national  farm-loan  associa- 
tions 

shall  amount  to 
$750,000 

in  any  Federal  land  bank,  said 
bank  shall  apply  semiannually  to 
the  payment  and  retirement  of 

the  shares  of  stock  which  were  is- 
sued to  represent  the  subscriptions 
to  the  original  capital  twenty-five 
per  centum 

of  all  sums  thereafter  subscribed  to 
capital  stock  until  all 

such  original  capital  stock 


is  retired  at  par. 

At  least  twenty  per  centum  of 
the  capital  stock  of  any  Federal 
land  bank  which  is  paid  in  by 
national  farm  loan  associations  shall 
consist  of  cash  in  the  vaults  of  said 
land  bank  or  of  deposits  in  member 
banks  of  the  Federal  reserve  system 
or  of  investments  in  negotiable 
interest-bearing  securities,  approved 
by  the  Federal  Farm  Loan  Board: 
Provided,  That  not  less  than  five 
per  centum»of  such  capital  stock 
shall  be  invested  in  bonds  of  the 
United  States. 


Whenever  capital  stock  of  any 
Federal  land  bank  or  joint  stock 
land  bank  to  the  amount  of  $100,000 
is  paid  in,  at  least  ten  per  centum 
thereof,  and  at  least  ten  per  centum 
of  any  further  payment  amounting 
to  $100,000,  shall  be  invested  in 
bonds  of  the  United  States,  not 
later  than  two  years  after  such  pay- 
ment. 

GOVERNMENT 

DEPOSITARIES. 

Sec.  6. 

That  all  Federal  land  banks  and 
joint-stock  land  banks  organized 
under  this  Act, 

when  designated  for  that  purpose 
by  the  Secretary  of  the  Treasury, 
shall  be  depositaries  of  public  money, 
except  receipts  from  customs,  under 


GOVERNMENT 

AGENCIES. 

Sec.  7 

That  all  Federal  land  banks  and 
joint-stock  land  banks  organized 
under  this  Act, 




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rural  credits  bill. 


21 


AS  PASSED  BY  SENATE. 

such  regulations  as  may  be  pre- 
scribed by  said  Secretary;  and  they 
may  also  be  employed  as  financial 
agents  of  the  Government;  and 
they 

shall  perform  all 
such 

reasonable  duties,  as 

depositaries  of  public  money  and 

financial  agents  of  the  Govern- 
ment 

, as  may  be  required  of  them.  And 
the  Secretary  of  the  Treasury 
shall 

require  of 

the  Federal  land  banks  and  joint 
stock  land  banks  thus  designated 
satisfactory  security,  by  the  deposit 
of  United  States  bonds  or  other- 
wise, for  the  safekeeping  and  prompt 
payment  of  the  public  money  de- 
posited with  them,  and  for  the 
faithful  performance  of  their  duties 
as  financial  agents  of  the  Govern- 
ment. No  Government  funds  de- 
posited under  the  provisions  of  this 
section  shall  be  invested  in  mort- 
gage loans. 

NATIONAL  FARM  LOAN  ASSOCIA- 
TIONS. 


AS  PASSED  BY  HOUSE. 


shall  perform  all 

reasonable  duties,  as 

financial  agents  of  the  Govern- 
ment 

that 

the  Secretary  of  the  Treasury 
may 

require  of 
them. 


NATIONAL  FARM  LOAN  ASSOCIA- 
TIONS. 


Sec.  7. 

That  corporations,  to  be  known  as 
national  farm  loan  associations,  may 
be  organized  by  persons  desiring  to 
borrow  money  on  farm  mortgage 
security  under  the  terms  of  this 
Act. 

Such  persons 

shall  enter  into  articles  of  associa- 
tion which  shall  specify  in  general 
terms  the  object  for  which 

each 

association  is  formed  and  the  ter- 
ritory within  which  its  operations 
are  to  be  carried  on,  and  which  may 
contain  any  other 

provisions, 


Sec.  8. 

That  corporations,  to  be  known  as 
national  farm  loan  associations,  may 
bo  organized  by  persons  desiring  to 
borrow  money  on  farm  mortgage 
security  under  the  terms  of  this 
Act. 

Persons  desiring  to  form  such  an 
association 

shall  enter  into  articles  of  associa- 
tion which  shall  specify  in  general 
terms  the  object  for  which 

• 

the 

association  is  formed  and  the  ter- 
ritory within  which  its  operations 
are  to  be  carried  on,  and  which  may 
contain  any  other 

provision, 


RURAL  CREDITS  BILL. 


22 


AS  PASSED  BY  SENATE. 

not  inconsistent  with  law,  which  the 
association  may  see  fit  to  adopt  for 
the  regulation  of  its  business  and 
the  conduct  of  its  affairs.  Said 
articles  shall  be  signed  by  the  per- 
sons uniting  to  form  the  associa- 
tion, and  a copy  thereof  shall  be 
forwarded  to  the  Federal  land  bank 
for  the  district,  to  be  filed  and  pre- 
served in  its  office. 

Every 


farm  loan  association  shall  elect,  in 
the  manner  prescribed  for  the  elec- 
tion of  directors  of  national  banking 
associations,  a board  of  not  less  than 
five  directors,  who  shall  hold  office 
for  the  same  period  and  under  the 
same  conditions  as  directors  of  na- 
tional banking  associations.  It 
shall  be  the  duty  of  said  board  of 
directors  to  choose  in  such  manner 
as  they  may  prefer  a secretary-treas- 
urer, who 

shall 

receive  such  compensation  as  said 
board  of  directors  shall  determine. 
The  board  of  directors'  shall  elect  a 
president,  a vice  president,  and  a 
loan  committee  of  three  members. 

The  directors  and  all  officers 
except  the  secretary-treasurer  shall 
serve  without  compensation,  unless 
the  payment  of  salaries  to  them 
shall  be  approved  by  the  Federal 
Farm  Loan  Board.  All  officers  and 
directors 


shall,  during  their  term  of  office,  be 
bona  fide  residents  of  the  territory 
within  which  the  association  is 
authorized  to  do  business 


It  shall  be  the  duty  of  the  secre- 
tary-treasurer of  every 


farm  loan  association  to  act  as  cus- 
todian of  its  funds  and  to  deposit 
the  same  in  such  bank  as  the  board 
of  directors  may  designate,  to  pay 
over  to  borrowers  all  sums  received 
for  their  account  from  the  Federal 
land  bank  upon  first  mortgage  as  in 
this  Act  prescribed,  and  to  meet  all 
other  obligations  of  the  association, 


AS  PASSED  BY  HOUSE. 

not  inconsistent  with  law,  which  the 
association  may  see  fit  to  adopt  for 
the  regulation  of  its  business  and 
the  conduct  of  its  affairs.  Said 
articles  shall  be  signed  by  the  per- 
sons uniting  to  form  the  associa- 
tion, and  a copy  thereof  shall  be 
forwarded  to  the  Federal  land  bank 
for  the  district,  to  be  filed  and  pre- 
served in  its  office. 

Every 

national 

farm  loan  association  shall  elect,  in 
the  manner  prescribed  for  the  elec- 
tion of  directors  of  national  banking 
associations,  a board  of  not  less  than 
five  directors,  who  shall  hold  office 
for  the  same  period  and  under  the 
same  conditions  as  directors  of  na- 
tional banking  associations.  It 
shall  be  the  duty  of  said  board  of 
directors  to  choose  in  such  manner 
as  they  may  prefer  a secretary-treas- 
urer, who 

may 

receive  such  compensation  as  said 
board  of  directors  shall  determine. 
The  board  of  directors  shall  elect  a 
president,  a vice  president,  and  a 
loan  committee  of  three  members. 

The  directors  and  all  officers 
except  the  secretary-treasurer  shall 
serve  without  compensation,  unless 
the  payment  of  salaries  to  them 
shall  be  approved  by  the  Federal 
Farm  Loan  Board.  All  officers  and 
directors 

except  the  secretary-treasurer 

shall,  during  their  term  of  office,  be 
bona  fide  residents  of  the  territory 
within  which  the  association  is 
authorized  to  do  business 

, and  shall  be  shareholders  of  the 
association. 

It  shall  be  the  duty  of  the  secre- 
tary-treasurer of  every 

national 

farm  loan  association  to  act  as  cus- 
todian of  its  funds  and  to  deposit 
the  same  in  such  bank  as  the  board 
of  directors  may  designate,  to  pay 
over  to  borrowers  all  sums  received 
for  their  account  from  the  Federal 
land  bank  upon  first  mortgage  as  in 
this  Act  prescribed,  and  to  meet  all 
other  obligations  of  the  association, 


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RURAL  CREDITS  BILL. 


23 


AS  PASSED  BY  SENATE. 

subject  to  thejordersjof/the  board 
of  directors  and  in  accordance  with 
the  by-laws  of  the  association. 
Said  secretary-treasurer  shall  like- 
wise collect,  receipt  for,  and  trans- 
mit to  the  Federal  land  bank  all 
payments  of  interest,  amortization 
installments,  or  principal  arising 
out  of  loans  made  through  the  asso- 
ciation. Fie  shall  be  the  custodian  of 
the  securities,  records,  papers,  cer- 
tificates of  stock,  and  all  documents 
relating  to  or  bearing  upon  the  con- 
duct of  the  affairs  of  the  association, 
lie  shall  furnish  a suitable  surety 
bond  to  be  prescribed  and  approved 
by  the  Federal  Farm  Loan  Board 
for  the  proper  performance  of  the 
duties  imposed  upon  him  under  this 
Act,  which  shall  cover  prompt  col- 
lection and  transmission  of  funds. 
He  shall  make  a quarterly  report  to 
the  Federal  Farm  Loan  Board  upon 
forms  to  be  provided  for  that  pur- 
ose.  Upon  request  from  said 
oard  said  secretary- treasurer  shall 
furnish  information  regarding  the 
condition  of  the 


farm  loan  association  for  which  he 
is  acting,  and  he  shall  carry  out  all 
duly  authorized  orders  of  said  board. 
He  shall  assure  himself  from  time 
to  time  that  the  loans  made  through 
the 


farm  loan  association  of  which  he  is 
an  officer  are  applied  to  the  purposes 
set  forth  in  the  application  of  the 
borrower  as  approved,  and  shall 
forthwith  report  to  the  land  bank 
of  the  district  any  failure  of  any 
borrower  to  comply  with  the  terms 
of  his  application  or  mortgage.  He 
shall  also  ascertain  and  report  to 
said  bank  the  amount  of  any  de- 
linquent taxes  on 

mortgaged  land 

and  the  name  of  the  delinquent. 

The  reasonable  expenses  of  the 
secretary-treasurer,  the  loan  com- 
mittee, and  other  officers  and  agents 
of 


farm  loan  associations,  and  the  sal- 
ary of  the  secretary-treasurer, 


AS  PASSED  BY  HOUSE. 

subject  to  the  orders  of  the^board 
of  directors  and  in  accordance  with 
the  by-laws  of  the  association. 
Said  secretary-treasurer  shall  like- 
wise collect,  receipt  for,  and  trans- 
mit to  the  Federal  land  bank  all 
payments  of  interest,  amortization 
installments,  or  principal  arising 
out  of  loans  made  through  the  asso- 
cia  tion.  He  shall  be  the  custodian  of 
the  securities,  records,  papers,  cer- 
tificates of  stock,  and  all  documents 
relating  to  or  bearing  upon  the  con- 
duct of  the  affairs  of  the  association. 
He  shall  furnish  a suitable  surety 
bond  to  be  prescribed  and  approved 
by  the  Federal  Farm  Loan  Board 
for  the  proper  performance  of  the 
duties  imposed  upon  him  under  this 
Act,  which  shall  cover  prompt  col- 
lection and  transmission  of  funds. 
He  shall  make  a quarterly  report  to 
the  Federal  Farm  Loan  Board  upon 
forms  to  be  provided  for  that  pur- 
pose. Upon  request  from  said 
board  said  secretary-treasurer  shall 
furnish  information  regarding  the 
condition  of  the 

national 

farm  loan  association  for  which  he 
is  acting,  and  he  shall  carry  out  all 
duly  authorized  orders  of  said  board. 
He  shall  assure  himself  from  time 
to  time  that  the  loans  made  through 
the 

national 

farm  loan  association  of  which  he  is 
an  officer  are  applied  to  the  purposes 
set  forth  in  the  application  of  the 
borrower  as  approved,  and  shall 
forthwith  report  to  the  land  bank 
of  the  district  any  failure  of  any 
borrower  to  comply  with  the  terms 
of  his  application  or  mortgage.  He 
shall  also  ascertain  and  report  to 
said  bank  the  amount  of  any  de- 
linquent taxes  on 

land  mortgaged  to  said  bank 

and  the  name  of  the  delinquent. 

The  reasonable  expenses  of  the 
secretary-treasurer,  the  loan  com- 
mittee, and  other  officers  and  agents 
of 

national 

farm  loan  associations,  and  the  sal- 
ary of  the  secretary-treasurer, 


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RURAL  CREDITS  BILL. 


24 


AS  PASSED  BY  SENATE. 

shall 

be  paid  from  the  general  funds  of 
the  association,  and  the  board  of 
directors  is  authorized  to  set  aside 
such  sums  as  it  shall  deem  requisite 
for  that  purpose  and  for  other  ex- 
penses ol  said  association.  When 
no  such  funds  are  available,  the 
board  of  directors  may  levy  an 
assessment  on  members 

and  prospective  members  of  the  as- 
sociation 

in  proportion  to  the  amount  of 

loans  granted  or  applied  for  by 
them, 

which  may  be  repaid  as  soon  as 
funds  are  available,  or  it  may  se- 
cure an  advance  from  the  Federal 
land  bank  of  the  district,  to  be  re- 
paid with  interest  at  the  rate  of  six 
per  centum  per  annum,  from  divi- 
dends belonging  to  said  association. 
Said  Federal  land  bank  is  hereby 
authorized  to  make  such  advance 
and  to  deduct  such  repayment. 

The  salary  of  the  secretary-treas- 
urer may  be  increased  or  reduced  by 
the  Federal  Farm  Loan  Board  in  its 
discretion. 

Ten  or  more  natural  persons  who 
are  the  owners,  or  about  to  become 
the  owners,  of  farm  land  qualified  as 
security  for  a mortgage  loan  under 
section  twelve  of  this  act,  may  unite 
to  form  a national  farm  loan  associa- 
tion. They  shall  organize  subject 
to  the  requirements  and  the  condi- 
tions specified  in  this  section  and  in 
section 

four 

of  this  act,  so  far  as  the  same  may  be 
applicable:  Provided,  That  the  board 
of'  directors  may  consist  of  five 
members  only,  and  instead  of  a sec- 
retary and  a treasurer  there  shall  be 
a secretary-treasurer,  who  need  not 
be  a shareholder  of  the  association. 

When  the  articles  of  association 
are  forwarded  to  the  Federal  land 
bank  of  the  district  as  provided  in 
this  section,  they  shall  be  accompa- 
nied by  the  written  report  of  the 
loan  committee  as  required  in  sec- 
tion 


AS  PASSED  BY  HOUSE. 

may 

be  paid  from  the  general  funds  of 
the  association,  and  the  board  of 
directors  is  authorized  to  set  aside 
such  sums  as  it  shall  deem  requisite 
for  that  purpose  and  for  other  ex- 
penses of  said  association.  When 
no  such  funds  are  available,  the 
board  of  directors  may  levy  an 
assessment  on  members 


in  proportion  to  the  amount  of 
stock  held  by  each, 

which  may  be  repaid  as  soon  as 
funds  are  available,  or  it  may  se- 
cure an  advance  from  the  Federal 
land  bank  of  the  district,  to  be  re- 
paid with  interest  at  the  rate  of  six 
per  centum  per  annum,  from  divi- 
dends belonging  to  said  association. 
Said  Federal  land  bank  is  hereby 
authorized  to  make  such  advance 
and  to  deduct  such  repayment. 


Ten  or  more  natural  persons  who 
are  the  owners,  or  about  to  become 
the  owners,  of  farm  land  qualified  as 
security  for  a mortgage  loan  under 
section  twelve  of  this  act,  may  unite 
to  form  a national  farm  loan  associa- 
tion. They  shall  organize  subject 
to  the  requirements  and  the  condi- 
tions specified  in  this  section  and  in 
section 

five 

of  this  act,  so  far  as  the  same  may  be 
applicable:  Provided,  That  the  board 
of  directors  may  consist  of  five 
members  only,  and  instead  of  a sec- 
retary and  a treasurer  there  shall  be 
a secretary-treasurer,  who  need  not 
be  a shareholder  of  the  association. 

When  the  articles  of  association 
are  forwarded  to  the  Federal  land 
bank  of  the  district  as  provided  in 
this  section,  they  shall  be  accompa- 
nied by  the  written  report  of  the 
loan  committee  as  required  in  sec- 
tion 


twenty 


ten 


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RURAL  CREDITS  BILL. 


25 


AS  PASSED  BY  SENATE. 

of  this  Act,  and  by  an  affidavit  stat- 
ing that  each  of  the  subscribers  is  the 
owner,  or  is  about  to  become  the 
owner,  of  farm  land  qualified  under 
section  twelve  of  this  Act  as  the 
basis  of  a mortgage  loan;  that  the 
loan  desired  by  each  person  is  not 
more  than  $10,000,  nor  less  than 

$200 

and  that  the  aggregate  of  the  de- 
sired loans  is  not  less  than  $20,000; 
that  said  affidavit  is  accompanied  by 

an  amount  in  cash 


equal  to  five  per  centum  of  the  ag- 
gregate sum  desired  on  mortgage 

loan 

which  is  intended  as  the  initial  con- 
tribution of  said  association  to  the 
capital  stock  of  said  Federal  land 
bank; 

and  that  a temporary  organization 
of  said  association  has  been  formed 
by  the  election  of  a board  of  direc- 
tors, a loan  committee,  and  a secre- 
tary-treasurer who  subscribes  to 
said  affidavit,  giving  his  residence 
and  post-office  address. 

Upon  receipt  of  such  articles  of 
association,  with  the  accompanying 
affidavit  and 

cash, 

the  directors  of  said  Federal  land 
bank 


See  matter  at  end  o£  this  paragraph. 


shall 


determine  whether  in  their  judg- 
ment a charter  should  be  granted  to 
such  association, 

and  they  shall  send  a representative 
to  investigate  the  solvency  and 
character  of  the  applicants  and  the 
value  of  their  lands. 

They  shall  forward  such  articles  of 
association  and  the  accompanying 
affidavit  to  the  Federal  Farm  Loau 
Board  with  then-  recommendation. 


AS  PASSED  BY  HOUSE. 

of  this  Act,  and  by  an  affidavit  stat- 
ing that  each  of  the  subscribers  is  the 
owner,  or  is  about  to  become  the 
owner,  of  farm  land  qualified  under 
section  twelve  of  this  Act  as  the 
basis  of  a mortgage  loan;  that  the 
loan  desired  by  each  person  is  not 
more  than  $10,000,  nor  less  than 

$100 

and  that  the  aggregate  of  the  de- 
sired loans  is  not  less  than  $20,000; 
that  said  affidavit  is  accompanied  by 

a subscription  to  stock  in  the  Fed- 
eral land  bank 

equal  to  five  per  centum  of  the  ag- 
gregate sum  desired  on  mortgage 

loans ; 


and  that  a temporary  organization 
of  said  association  has  been  formed 
by  the  election  of  a board  of  direc- 
tors, a loan  committee,  and  a secre- 
tary-treasurer who  subscribes  to 
said  affidavit,  giving  his  residence 
and  post-office  address. 

Upon  receipt  of  such  articles  of 
association,  with  the  accompanying 
affidavit  and 

stock  subscription 

the  directors  of  said  Federal  land 
bank 

shall  send  an  appraiser  to  investigate 
the  solvency  and  character  of  the 
applicants  and  the  value  of  their 
lands,  and 

shall 

then 

determine  whether  in  their  judg- 
ment a charter  should  be  granted  to 
such  association. 


See  matter  above. 


They  shall  forward  such  articles  of 
association  and  the  accompanying 
affidavit  to  the  Federal  Farm  Loan 
Board  with  their  recommendation. 


42564 — S.  Doc.  444,  64-1 4 


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RURAL  CREDTTS  RILL. 


20 


AS  PASSED  BY  SENATE. 

If  said  recommendation  is  unfavor- 
able. the  charter  shall  be  refused. 

and  the  cash  accompanying  the  ap- 
plication shall  be  returned  to  the 
applicants  without  deduction. 

If  said  recommendation  is  favor- 
able, the  Federal  Farm  Loan  Board 
shall  thereupon  grant  a charter  to 
the  applicants  therefor,  designating 
the  territory  in  which  such  associa- 
tion may  make  loans,  and  shall  for- 
ward said  charter  to  said  applicants 
through  said  Federal  land  bank: 
Provided,  That  said 


Farm  Loan  Board  may  for  good 
cause  shown  in  any  case  refuse  to 
grant  a charter. 

Upon  receipt  of  its  charter  such 


farm  loan  association  shall  be  au- 
thorized and  empowered  to  receive 
from  the  Federal  land  bank  of  the 
district  sums  to  be  loaned  to  its 
members  under  the  terms  and  con- 
ditions of  this  Act. 

Whenever  any 


farm  loan  association  shall  desire  to 
secure  for  any  member  a loan  on  first 
mortgage  from  the  Federal  land 
bank  of  its  district  it  shall  subscribe 
for 

, and  pay  for  in  cash, 

capital  stock  of  said  land  bank  to  the 
amount  of  five  per  centum  of  such 
loan. 


Such  capital  stock  shall  be  held  by 
said  land  bank  as  collateral  security 
for  the  payment  of  said  loan,  but 
said  association  shall  be  paid  any 
dividends  accruing  and  payable  on 
said  capital  stock  while  it  is  out- 
standing. Such  stock  may,  in  the 
discretion  of  the  directors, 


be  paid  off  at  par  and  retired. 


AS  PASSED  BY  HOUSE. 

If  said  recommendation  is  unfavor- 
able, the  charter  shall  be  refused. 


If  said  recommendation  is  favor- 
able, the  Federal  Farm  Loan  Board 
shall  thereupon  grant  a charter  to 
the  applicants  therefor,  designating 
the  territory  in  which  such  associa- 
tion may  make  loans,  and  shall  for- 
ward said  charter  to  said  applicants 
through  said  Federal  land  bank: 
Provided,  That  said 

Federal 

Farm  Loan  Board  may  for  good 
cause  shown  in  any  case  refuse  to 
grant  a charter. 

Upon  receipt  of  its  charter  such 
national 

farm  loan  association  shall  be  au- 
thorized and  empowered  to  receive 
from  the  Federal  land  bank  of  the 
district  sums  to  be  loaned  to  its 
members  under  the  terms  and  con- 
ditions of  this  Act. 

Whenever  any 

national 

farm  loan  association  shall  desire  to 
secure  for  any  member  a loan  on  first 
mortgage  from  the  Federal  land 
bank  of  its  district  it  shall  subscribe 
for 


capital  stock  of  said  land  bank  to  the 
amount  of  five  per  centum  of  such 
loan 

, such  subscription  to  be  paid  in 
cash  upon  the  granting  of  the  loan 
by  said  land  bank. 

Such  capital  stock  shall  be  held  by 
said  land  bank  as  collateral  security 
for  the  payment  of  said  loan,  but 
said  association  shall  be  paid  any 
dividends  accruing  and  payable  on 
said  capital  stock  while  it  is  out- 
standing. Such  stock  may,  in  the 
discretion  of  the  directors, 

and  with  the  approval  of  the  Fed- 
eral Farm  Loan  Board, 

be  paid  off  at  par  and  retired 


« 


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RURAL  CREDITS  BILL. 


27 


AS  PASSED  BY  SENATE. 


In  such 

case 

the 


farm  loan  association  shall  pay  off  at 
par  and  retire  the  corresponding 


shares  of  its  stock  which  were  issued 
when  said  land  bank  stock  was 

issued 

National  farm  loan  associations 
may  he  organized  with  limited  or 
with  unlimited  liability,  and  each 
shall  be  designated  as  a national 
farm  loan  association  limited,  or  a 
national  farm  loan  association  un- 
limited, as  the  case  may  be.  Asso- 
ciations with  limited  liability  may 
be  also  designated  as  division  A as- 
sociations; associations  with  unlim- 
ited liability  as  division  B associa- 
tions. 

CAPITAL  STOCK 


OF  NATIONAL  FARM  LOAN  ASSOCIA- 
TIONS. 

Sec.  8. 

That  the  shares  in  national  farm 
loan  associations  shall  be  of  the  par 
value  of  $5  each. 

Every  shareholder  shall  be  enti- 
tled to  one  vote  on  each  share  of 
stockdield  by  him  at  aLl  elections  of 
directors  and  in  deciding  all  ques- 
tions at  meetings  of  shareholders: 
Provided,  That  the  maximum  num- 
ber of  votes  which  may  be  cast  by 
any  one  shareholder  shall  be 

ten. 

No  persons  but  borrowers  on  farm 
land  mortgages  shall  be  members  or 
shareholders  of 


AS  PASSED  BY  HOUSE. 

proportional  to  any  reduction  which 
may  be  made  in  the  principal  sum 
loaned)  to  the  member;  and  the 
directors  shall.pay  off  at  par  and  re- 
tire such  stock  outstanding  when  the 
loan  shall  have  been  fully  repaid. 



In  such 

cases 

the 

national 

farm  loan  association  shall  pay  off  at 
par  and  retire  the  corresponding 

share  or 

shares  of  its  stock  which  were  issued 
when  said  land  bank  stock  was 

subscribed. 


CAPITAL  STOCK 

AND  SPECIAL  PROVISIONS 

OF  NATIONAL  FARM  LOAN  ASSOCIA- 
TIONS. 

Sec.  9. 

That  the  shares  in  national  farm 
loan  associations  shall  be  of  the  par 
value  of  $5  each. 

Every  shareholder  shall  be  enti- 
tled to  one  vote  on  each  share  of 
stock  held  by  him  at  all  elections  of 
directors  and  in  deciding  all  ques- 
tions at  meetings  of  shareholders: 
Provided,  That  the  maximum  num- 
ber of  votes  which  may  be  cast  by 
any  one  shareholder  shall  be 

twenty 

No  persons  but  borrowers  on  farm 
land  mortgages  shall  be  members  or 
shareholders  of 


national 


' 


1 


- 


* 


RURAL  CREDITS  BILL. 


AS  PASSED  BY  SENATE. 

farm  loan  associations. 

Any  person  desiring  to  borrow  on 
farm  land  mortgage  through  a 


farm  loan  association  shall 

deposit  with  the  secretary-treasurer 
thereof  for  the  purchase  of  its  stock 
at  par 

an  amount  equal  to  five  per  centum 
of  the  face  of  the  desired  loan. 


If  the  loan  is  granted,  the  applicant 
therefor 

shall,  thereupon 


become  the  owner  of  one  share  of 
capital  stock  in  said  loan  associa- 
tion for  each  $100  of  the  face  of 
his  loan, 

which  shall  be  paid  off  at  par  and 
retired  upon  full  payment  of  said 
loan. 

Said  capital  stock  shall  be  held  by 
said  association  as  collateral  secu- 
rity for  the  payment  of  said  loan, 
but  said  borrower  shall  be  paid  any 
dividends  accruing  and  payable  on 
said  capital  stock  while  it  is  out- 
standing. 

Such  stock  may  at  any  time,  in  the 
discretion  of  the  directors  and  with 
the  permission  of  the  directors  of 
the  land  bank,  be  paid  off  at  par 
and  retired.  In  such  case  the 
holder  of  said  stock  shall  be  credited 
with  the  par  value  thereof,  and  if 
said  par  value  shall  exceed  the 
amount  then  due  on  his  loan,  the 
balance  shall  be  paid  to  him  in  cash. 

Every 


farm  loan  association  formed  under 
this  Act  shall  by  its  articles  of  asso- 
ciation provide  for  an  increase  of 
its  capital  stock  from  time  to  time 
for  the  purpose  of  securing 

additional 

loans  for  its  members  and  pro- 


AS  PASSED  BY  HOUSE. 

farm  loan  associations. 

Any  person  desiring  to  borrow  on 
farm  land  mortgage  through  a 

national 

farm  loan  association  shall 

subscribe  for  shares  of  stock  in  such 
farm  loan  association  to 


an  amount  equal  to  five  per  centum 
of  the  face  of  the  desired  loan, 

said  subscription  to  be  paid  in  cash 
upon  the  granting  of  the  loan. 

If  the  loan  is  granted,  the  applicant 


shall, 

upon  full  payment  therefor, 

become  the  owner  of  one  share  of 
capital  stock  in  said  loan  associa- 
tion for  each  $100  of  the  face  of 
his  loan, 


or  any  fractional  part  thereof. 

Said  capital  stock  shall  be  held  by 
said  association  as  collateral  secu- 
rity for  the  payment  of  said  loan, 
but  said  borrower  shall  be  paid  any 
dividends  accruing  anti  payable  on 
said  capital  stock  while  it  is  out- 
standing. 


Every 

national 

farm  loan  association  formed  under 
this  Act  shall  by  its  articles  of  asso- 
ciation provide  for  an  increase  of 
its  capital  stock  from  time  to  time 
for  the  purpose  of  securing 


loans  for  its  members  and  pro- 


. 


. 


; 


. 


, * ' 


* 


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. 


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' 


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. 


1 • • ■ ‘ ■ ■ ■ 


■ i . ■ 


RURAL  CREDITS  BILL. 


29 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 

viding  for  the  issue  of  shares  to  viding  for  the  issue  of  shares  to 
borrowers  in  accordance  with  the  borrowers  in  accordance  with  the 
provisions  of  this  Act.  Such  in-  provisions  of  this  Act.  Such  in- 
creases shall  be  included  in  the  creases  shall  be  included  in  the 
quarterly  reports  to  the  Federal  quarterly  reports  to  the  Federal 
Farm  Loan  Board.  Farm  Loan  Board. 

Any  farm  loan  association  formed 
under  this  Act  may  reduce  its  cap- 
ital stock  to  any  sum  not  below  five 
per  centum  of  the  unpaid  principal 
of  mortgages  indorsed  by  it. 


NATIONAL  FARM  LOAN  ASSOCIATIONS .’ 
SPECIAL  PROVISIONS. 

This  section,  number  15  in  Senate  bill,  will  be 
found  on  page  43.  For  cross  reference  and  compari- 
son only  it  is  duplicated  here. 

Sec.  15.  That 
any  person 

who  shall  become  a shareholder  of 
any 

national  farm  loan  association  shall 
be  entitled  to  borrow  money  on 
farm  land  mortgage  upon  fling  his 
application  in  accordance  with  sec- 
tion 

seven 

and  otherwise  complying  with  the 
terms  of  this  Act  whenever  the 
Federal  land  bank  of  the  district 
has  funds  available  for  that  pur- 
pose, unless  said  land  bank  or  the 
Federal  Farm  Loan  Board  shall,  in 
its  discretion,  otherwise  determine. 

Such  member  may,  at  his  option, 
pay  the  expenses  for  appraisal,  ex- 
amining title,  drawing  legal  papers, 
recording  and  similar  services,  or 
he  may  require  such  expenses  to  be 
advanced  by  the  Federal  land  bank 
making  the  loan,  in  which  case  said 
expenses  may  be  made  a part  of  the 
face  of  the  loan  and  paid  ojf  in 
amortization  payments.  Such  ad- 
dition to  the  loan  shall  not  be  per- 
mitted to  increase  said  loan  above 
the  fifty  per  centum  limited  in  sec- 
tion twelve. 

Any  person  who  shall  borrow 
from  a Federal  land  bank  for  the 
purpose  of  purchasing  a farm  for  a 
home  under  the  provisions  of  sec- 
tion twelve  of  this  Act  may,  at  his 
option,  borrow  from  the  Federal 
land  bank  such  sum  as  is  needed  to 
pay  for  his  required  shares  of  stock 
in  the  farm  loan  association,  and 
such  sum  may  be  borrowed  in  ad- 
dition to  the  amount  permitted  to 
be  borrowed  under  the  provisions 
of  said  section  twelve. 

Subject  to  rules  and  regulations 
prescribed  by  the  Federal  Farm 


Any  person 

whose  application  for  membership 
is  accepted  by  a 

national  farm  loan  association  shall 
be  entitled  to  borrow  money  on 
farm  land  mortgage  upon  filing  his 
application  in  accordance  with  sec- 
tion 

eight 

and  otherwise  complying  with  the 
terms  of  this  Act  whenever  the 
Federal  land  bank  of  the  district 
has  funds  available  for  that  pur- 
pose, unless  said  land  bank  or  the 
Federal  Farm  Loan  Board  shall,  in 
its  discretion,  otherwise  determine. 


Any  person  desiring  to  secure  a 
loan  through  a national  farm  loan 
association  under  the  provisions  of 
tills  Act  may,  at  his  option,  borrow 
from  the  Federal  land  bank  through 
such  association  the  sum  necessary 
to  pay  for  shares  of  stock  subscribed 
for  by  him  in  the  national  farm  loan 
association,  such  sum  to  be  made  a 
part  of  the  face  of  the  loan  and  paid 
off  in  amortization  payments:  Pro- 
vided, however,  That  such  addition 
to  the  loan  shall  not  be  permitted  to 
increase  said  loan  above  the  sixty 
per  centum  limited  in  section  twelve. 


' 


'■  ■ 

. 

, 


,, 


- 


■ 


. 

- -• 


■ 


■ 


- 

' > I 


. 


RURAL.  CREDITS  RILE. 


AS  PASSED  BY  SENATE. 

Loan  Hoard,  any  national  farm  loan 
association  shall  be  entitled  to  re- 
tain as  a commission  from  each , in- 
terest payment  on  any  loan  indorsed 
by  it,  not  to  exceed  one-quarter  of 
one  per  centum  semiannually  upon 
the  unpaid  principal  of  said  loan, 
any  amounts  so  retained  as  commis- 
sions to  be  deducted  from  dividends 
payable  to  such  farm  loan  associa- 
tion from  the  Federal  land  bank, 
and  to  borrow  from  the  land  bank 
of  the  district,  at  a rate  of  interest 
not  to  exceed  six  per  centum  per  an- 
num, sums  aygregatiny  one-fourth 
of  its  total  stock  holdings  in  said 
land,  bank. 

DIVISION  A. 

NATIONAL  FARM  LOAN  ASSOCIATIONS 
LIMITED. 

Sec.  9.  That 
Shareholders  of  every 
division  A 

association  shall  be  held  individually 
responsible,  equally  and  ratably, 
and  not  one  for  another,  for  all  con- 
tracts, debts,  and  engagements  of 
such  association  to  the  extent  of  the 
amount  of  stock  owned  by  them  at 
the  par  value  thereof,  in  addition 
to  the  amount  paid  in  and  repre- 
sented by  their  shares. 

After  a charter  has  been  granted 
to  a 

division  A 

association,  any  natural  person  who 
is  the  owner,  or  about  to  become  the 
owner,  of  farm  land  qualified  under 
section  twelve  of  this  Act  as  the 
basis  of  a mortgage  loan,  and  who 
desires  to  borrow  on  a mortgage  of 
such  farm  land,  may  become  a mem- 
ber of 

a division  A 

association  by  a two-thirds  votes  of 
the  directors  upon  subscribing  for 

, and  paying  for  in  cash, 

one  share  of  the  capital  stock  of  such 
association  for  each  $100  of  the  face 
of  his  proposed  loan 


He  shall  at  the  same  time  file  with 
the  secretary-treasurer  his  applica- 
tion for  a mortgage  loan,  giving  the 
particulars  required  by  section 
twelve  of  this  Act. 

If  membership  is  refused  to  any 
applicant  under  this  section,  or  if 
the  loan  applied  for  is  for  any  reason 


AS  PASSED  BY  HOUSE. 


Shareholders  of  every 

national  farm  loan 

association  shall  be  held  individually 
responsible,  equally  and  ratably, 
and  not  one  for  another,  for  all  con- 
tracts, debts,  and  engagements  of 
such  association  to  the  extent  of  the 
amount  of  stock  owned  by  them  at 
the  par  value  thereof,  in  addition 
to  the  amount  paid  in  and  repre- 
sented by  their  shares. 

After  a charter  has  been  granted 
to  a 

national  farm  loan 

association,  any  natural  person  who 
is  the  owner,  or  about  to  become  the 
owner,  of  farm  land  qualified  under 
section  twelve  of  this  Act  as  the 
basis  of  a mortgage  loan,  and  who 
desires  to  borrow  on  a mortgage  of 
such  farm  land,  may  become  a mem- 
ber of 

the 

association  by  a two-thirds  vote  of 
the  directors  upon  subscribing  for 


one  share  of  the  capital  stock  of  such 
association  for  each  $100  of  the  face 
of  his  proposed  loan 

or  any  fractional  part  thereof. 

He  shall  at  the  same  time  file  with 
the  secret  ary-treasurer  his  applica- 
tion for  a mortgage  loan,  giving  the 
particulars  required  by  section 
twelve  of  this  Act. 

If  membership  is  refused  to  any 
applicant  under  this  section,  or  if 
the  loan  applied  for  is  for  any  reason 


' 


' 


■ 


. ' 


. 


. 


X - 

■M 


■ 


- 


" 

- 

RURAL  CREDITS  BILL. 


31 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 

rejected,  the  sum  deposited  by  him  rejected,  the  sum  deposited  by  him 
shall  be  returned.  shall  be  returned 

, less  such  deductions  as  may  be  au-  without  deduction. 
thorized  by  regulations  of  the  Fed- 
eral Farm  Loan  Board 

DIVISION  B. 

NATIONAL  FARM  LOAN  ASSOCIATIONS 
UNLIMITED. 

Sec.  10.  That  the  members  of 
every  division  B association  shall 
be  held  individually  responsible, 
equally  and  ratably,  one  for  an- 
other, for  all  contracts,  debts  and 
engagements  of  such  association, 
and  the  articles  of  association  and 
the  charter  of  every  such  associa- 
tion shall  distinctly  state  that  the 
liability  of  each  member  is  unlim- 
ited. 

Every  member  of  a division  B 
association  shall  sign  an  agreement 
to  be  individually  liable  for  all  con- 
tracts, debts  and  engagements  ot 
such  association,  and  to  pay  his 
equitable  proportion  of  any  con- 
tract. debt  or  engagement  of  such 
association  to  any  member  who 
shall  be  obliged  to  answer  individu- 
ally therefor. 

After  a charter  has  been  granted 
to  a division  B association,  any 
natural  person  who  is  the  owner,  or 
about  to  become  the  owner,  of  farm 
land  qualified  under  section  twelve 
of  this  Act  as  the  basis  of  a mort- 
gage loan,  and  who  desires  to  bor- 
row7 on  a mortgage  of  such  farm 
land,  may  become  a provisional 
member  of  a division  B association 
by  unanimous  vote  of  the  directors 
upon  subscribing  for,  and  paying 
for  in  cash,  one  share  of  the  capital 
stock  of  such  association  for  each 
SI 00  of  the  face  of  his  proposed 
loan.  He  shall  at  the  same  time 
file  with  the  secretary-treasurer  his 
application  for  a mortgage  loan, 
giving  the  particulars  required  by 
section  twelve  of  this  Act.  The 
secretary-treasurer  shall  thereupon 
notify  each  member  of  such  asso- 
ciation of  the  application  for  mem- 
bership, giving  the  name  and  post- 
office  address  of  the  applicant,  and 
the  amount  he  desires  to  borrow, 
describing  briefly  the  land  proposed 
to  be  mortgaged.  Unless  at  least 
one-fifth  of  the  members  of  such 
association  shall  file  with  said  sec- 
retary-treasurer within  ten  days  of 
the  mailing  of  such  notice  wTritten 
objection  to  the  application,  it  shall 
be  granted,  and  the  appheant  shall 


— 


I ' ■' 


. 

. 

1 


■ 


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. 


. 

■ 


■ . 

' 


V " 

■ 


' 


. 


RURAL  CREDITS  BILL. 


32 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 

thereupon  become  a regular  mem- 
ber; but  bis  admission  to  member- 
ship shall  not  entitle  him  to  borrow 
any  sum  in  excess  of  the  amount  to 
which  the  appraisal  of  his  property 
shall  entitle  him.  If  membership 
is  refused  to  any  applicant  under 
this  section,  or  if  the  loan  applied 
for  is  for  any  reason  rejected,  the 
sum  deposited  by  him  shall  be  re- 
turned, less  such  deductions  as  may 
lie  authorized  by  regulations  of  the 
Federal  Farm  Loan  Board. 


APPRAISAL. 

This  section,  number  19  in  Senate  bill,  will  be 
found  on  pane  50.  For  comparison  and  reference  only 
it  is  duplicated  here. 

Sec.  19.  That  whenever  an  appli- 
cation for  a mortgage  loan  is  made 
to  a 

dimsion  A or  a division  B 

association,  it  shall  be  first  referred 
to  the  loan  committee  provided  for  in 
section 

seven 

of  this  Act.  Said  loan  committee 
shall  examine  the  land  which  is  of- 
fered as  security  for  the  desired  loan 
and  shall  make  a detailed  written 
report  signed  by  all  three  members, 
giving  the  appraisal  of  said  land  as 
determined  by  them,  and  such  other 
information  as  may  be  required  by 
rules  and  regulations  to  be  prescribed 
by  the  Federal  Farm  Loan  Board. 
No  loan  shall  be  approved  by  the 
directors  unless  said  loan  committee 
agrees 

unanimously 

upon  a,  favorable  report. 

The  written  report  of  said  loan 
committee  shall  be  submitted  to  the 
Federal  land  bank, 

together  with  the  application  for  the 
loan, 

and  the  directors  of  said  land  bank 
shall  examine  said  written  report 
when  they  pass  upon  the  loan  appli- 
cation which  it  accompanies , but  they 
shall  not  be  bound  by  said  appraisal. 

Before,  any  mortgage  loan  is  made 
by  any  Federal  land  bank,  or  joint 
stock  land  bank,  it  shall  refer  the 
application  and  written  report  of 
the  loan  committee  to  one  or  more 
of  the 

land  bank 


APPRAISAL. 


Sec.  10.  That  whenever  an  appli- 
cation for  a mortgage  loan  is  made 
to  a 

national  farm  loan 

association,  it  shall  be  first  referred 
to  the  loan  committee  provided  for 
in  section 

eight 

of  this  Act.  Said  loan  committee 
shall  examine  the  land  which  is 
offered  as  security  for  the  desired 
loan  and  shall  make  a detailed  writ- 
ten report  signed  by  all  three  mem- 
bers, giving  the  appraisal  of  said 
land  as  determined  by  them,  and 
such  other  information  as  may  be 
required  by  rules  and  regulations  to 
be  prescribed  by  the  Federal  Farm 
Loan  Board.  No  loan  shall  be  ap- 
proved by  the  directors  unless  said 
loan  committee  agrees 


upon  a favorable  report. 

The  written  report  of  said  loan 
committee  shall  be  submitted  to 
the  Federal  land  bank, 


and  the  directors  of  said  land  bank 
shall  examine  said  written  report 
when  they  pass  upon  the  loan  appli- 
cation which  it  accompanies,  but 
they  shall  not  be  bound  by.  said 
appraisal. 

Before  any  mortgage  loan  is  made 
by  any  Federal  land  bank,  or  joint- 
stock  land  bank,  it  shall  refer  the 
application  and  written  report  of 
the  loan  committee  to  one  or  more 
of  the 

appraisers  appointed  under  the  au- 


: v 1 i ■ H 


- 

* 


' 


■ 


, 

S. 


* 


■ 


- - 


RURAL  CREDITS  BILL. 


33 


AS  PASSED  BY  SENATE. 

appraisers  appointed  under  the  au- 
thority of  section  three  of  this  Act,  and 
such  appraiser  or  appraisers  shall 
investigate  and  make  a written  report 
upon  the  land  offered  as  security  for 
said  loan.  No  such  loan  shall  be 
made  by  said  land  bank  unless  said 
written  report  is  favorable. 

Whenever  any  Federal  land  bank, 
or  joint  stock  land  bank,  shall  desire 
to  issue  farm  loan  bonds  under  the 
provisions  of  section  twenty-two  oj 
this  Act,  the  Federal  Farm  Loan 
Board  shall  refer  the  application  of 
such  land  bank  to  one  or  more  of 
the  special  appraisers  appointed 
under  the  authority  of  section  three 
of  this  Act.  Such  special  appraiser 
or  appraisers  shall  make  such  exam- 
ination and  appraisal  of  the  mort- 
gages offered  as  collateral  security 
for  such  bonds  as  the  Federal  Farm 
Loan  Board  shall  direct,  and  shall 
make  a written  report  to  said  board. 
No  issue  of  farm  loan  bonds  shall  be 
authorized  unless  the  Federal  Farm 
Loan  Board  shall  approve  such  issue 
in  writing. 

Forms  for  appraisal  reports  for 
farm  loan  associations  and  land 
banks  shall  be  prescribed  by  the 
Federal  Farm  Loan  Board. 

Land  bank  appraisers  and  special 
appraisers  shall  make  such  exam- 
inations and  appraisals  and  con- 
duct such  investigations,  concern- 
ing farm  loan  bonds  and  first  mort- 
gages, as  the  Federal  Farm  Loan 
Board  shall  direct. 

No  borrower  under  this  Act  shall 
be  eligible  as  an  appraiser  under 
this  section,  but  borrowers  may  act 
as  members  of  a loan  committee  in 
any  case  where  they  are  not  per- 
sonally interested  in  the  loan  under 
consideration.  When  any  member 
of  a loan  committee  or  of  a board 
of  directors  is  interested,  directly  or 
indirectly,  in  a loan,  a majority 
of  the  board  of  directors  shall  ap- 
point a substitute  to  act  in  his  place 
in  passing  upon  such  loan. 

POWERS  OF  NATIONAL  FARM  LOAN 
ASSOCIATIONS. 

Sec.  11.  That  every  national 
farm  loan  association  shall  have 
power : 

First.  To  indorse,  and  thereby 
become  liable  for  the  payment  of, 
mortgages  taken  from  its  share- 
holders by  the  Federal  land  bank 
of  its  district. 

Second.  To  receive  from  the  Fed- 
eral land  bank  of  its  district  funds 
42564— S.  Doc.  444,  64-1—5 


AS  PASSED  BY  HOUSE. 

thority  of  section  three  of  this 
Act,  and  such  appraiser  or  ap- 
praisers shall  investigate  and  make 
a written  report  upon  the  land 
offered  as  security  for  said  loan. 
No  such  loan  shall  be  made  by  said 
land  bank  unless  said  written  report 
is  favorable. 


No  borrower  under  this  Act  shall 
be  eligible  as  an  appraiser  under 
this  section,  but  borrowers  may  act 
as  members  of  a loan  committee  in 
any  case  where  they  are  not  person- 
ally interested  in  the  loan  under 
consideration.  When  any  member 
of  a loan  committee  or  of  a board  of 
directors  is  interested,  directly  or 
indirectly,  in  a loan,  a majority  of 
the  board  of  directors  of  any  na- 
tional farm  loan  association  shall 
appoint  a substitute  to  act  in  his 
place  in  passing  upon  such  loan. 

POWERS  OF  NATIONAL  FARM  LOAN 
ASSOCIATIONS. 

Sec.  11.  That  every  national 
farm  loan  association  shall  have 
power : 

First.  To  indorse,  and  thereby 
become  liable  for  the  payment  of, 
mortgages  taken  from  its  share- 
holders by  the  Federal  land  bank 
of  its  district. 

Second.  To  receive  from  the  Fed- 
eral land  bank  of  its  district  funds 


■ 

_ 

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'■ 

■ 


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' 


' 


I 

■ 

, 


. 

' 

■ 

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. 


■ 

. . 


RURAL  CREDITS  BILL. 


34 


AS  PASSED  BY  SENATE. 

advanced  by  said  land  bank,  and 
to  deliver  said  funds  to  its  share- 
holders oil  receipt  of  first  mortgages 
qualified  under  section  twelve  of 
this  Act. 

Third.  To  acquire  and  dispose  of 
such  property,  real  or  personal,  as 
may  be  necessary  or  convenient  for 
the  transaction  of  its  business. 

Fourth.  Against  deposits  of  cur- 
rent funds,  to  issue  certificates  in 
any  amount,  bearing  interest  at  not 
to  exceed  four  per  centum  per  an- 
num after  six  days  from  date,  con- 
vertible into  farm  loan  bonds  when 
presented  at  the  Federal  land  bank 
of  the  district  in  any  multiple  of 
$25.  Such  deposits,  when  received, 
shall  be  forthwith  transmitted  to 
said  land  bank,  and  be  invested  by 
it  in  the  purchase  of  farm  loan 
bonds  issued  by  a Federal  land 
bank  or  in  first  mortgages  as  defined 
by  this  Act.  The  mortgages  thus 
taken  may  be  hypothecated  with 
the  farm  loan  registrar  of  the  dis- 
trict against  an  issuance  of  farm 
loan  bonds  as  provided  for  in  sec- 
tion twenty-two  and  section  twenty- 
four  of  this  Act,  but  such  bonds 
when  received  either  by  purchase 
or  for  issuance  shall  not  be  delivered 
or  issued  except  in  exchange  for  and 
upon  presentation  for  redemption 
and  cancellation  of  an  equal  amount 
of  convertible  certificates  issued  by 
a farm  loan  association,  any  differ- 
ence under  $25  in  such  exchange 
being  adjusted  in  cash.  When  thus 
redeemed  and  canceled,  such  cer- 
tificates shall  be  returned  to  the 
farm  loan  association  which  issued 
them. 


AS  PASSED  BY  HOUSE. 

advanced  by  said  land  bank,  and 
to  deliver  said  funds  to  its  share- 
holders on  receipt  of  first  mortgages 
qualified  under  section  twelve  of 
this  Act. 

Third.  To  acquire  and  dispose  of 
such  property,  real  or  personal,  as 
may  be  necessary  or  convenient  for 
the  transaction  of  its  business. 


Fourth.  Against  deposits  of  cur- 
rent funds,  to  issue  certificates  for 
$20  and  $50,  or  any  multiple  of 
either,  convertible  into  Federal  farm 
loan  bonds;  such  deposits  to  be 
forthwith  transmitted  to  the  Fed- 
eral land  bank  of  the  district.  The 
land  bank  shall,  as  soon  as  practi- 
cable after  the  receipt  of  any  money 
so  deposited  with  any  national 
farm  loan  association,  forward  to 
such  association  Federal  farm  loan 
bonds  of  a par  value  equal  to  the 
amount  received  from  such  asso- 
ciation. Such  association  shall  hold 
such  bonds  in  trust,  to  redeem  its 
outstanding  convertible  certificates 
and  shall  not  deliver  them  except 
in  exchange  and  upon  presentation 
for  redemption  and  cancellation  of 
an  equal  amount  of  such  convertible 
certificates.  When  such  certificates 
are  redeemed  bv  the  association 


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RURAL  CREDITS  BILL. 


35 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 

issuing  them  they  shall  he  canceled. 
Such  association  may  charge  the 
holder  of  such  certificates  the  actual 
expense  incurred  in  forwarding  the 
bonds  from  the  land  bank  to  the 
association,  together  with  accrued 
interest.  Such  accrued  interest,  if 
collected,  to  he  forwarded  to  the 
Federal  land  bank. 


RESTRICTIONS  ON  LOANS  BASED  ON 
FIRST  MORTGAGES. 

Sec.  12.  That  no  Federal  land 
bank  organized  under  this  Act  shall 
make  loans  except  upon  the  follow- 
ing terms  and  conditions: 

First.  Said  loans  shall  be  secured 
by  duly  recorded  first  mortgages  on 
farm  land  within  the  land-bank  dis- 
trict in  which  the  bank 

shall  be 

situated. 

Second.  Every  such  mortgage  shall 
contain  an  agreement  for  the  pay- 
ment of  a fixed  number  of  semian- 
nual or  annual  installments  suffi- 
cient to  provide  for  an  agreed  rate 
of  interest  during  the  term  and  for 
the  payment  of  the  principal  dur- 
ing and  at  the  end  of  the  term,  on 
what  is  known  as  the  amortization 
plan. 

Third.  Every  such  mortgage  shall 
run  for  a period  of  at  least  five  years 
and  not  exceeding  sixty  years. 

Fourth.  Every  mortgage  loan 
made  under  this  Act,  for  whatever 
period,  shall  provide  for  its  extin- 
guishment, at  the  option  of  the  bor- 
rower, in  whole  or  in  part,  at  any 
date  set  for  the  payment  of  interest 
after  five  years  from  the  date  upon 
which  said  loan  was  made,  as  fol- 
lows: 

(a)  By  the  tender  at  their  face 
value  of  farm  loan  bonds  issued  by 
the  land  bank  holding  such  mort- 
gage, all  unmatured  coupons  being 
attached  to  said  bonds. 

(b)  By  advance  payments  in  cash 
in  sums  of  $100,  or  any  multiple 
thereof.  In  such  case  the  Federal 
land  bank  receiving  such  payments 
shall  purchase  for  its  own  account, 
and  credit  at  par  upon  the  mort- 
gage, farm  loan  bonds  in  suitable 
amounts;  said  land  bank  may  call, 
as  may  be  necessary,  farm  loan 
bonds  in  suitable  amounts,  and 
when  such  calls  shall  have  become 
effective  shall  credit  such  payments 
on  such  mortgage: 


RESTRICTIONS  ON  LOANS  BASED  ON 
FIRST  MORTGAGES. 

Sec.  12.  That  no  Federal  land 
bank  organized  under  this  Act  shall 
make  loans  except  upon  the  follow- 
ing terms  and  conditions : 

First.  Said  loans  shall  be  secured 
by  duly  recorded  first  mortgages  on 
farm  land  within  the  land-bank  dis- 
trict in  which  the  bank 

is 

situated. 


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RURAL  CREDITS  BILL.  36 

AS  PASSED  BY  SENATE. 

AS  PASSED  BYt  HOUSE. 

Second.  Every  such  mortgage 
shall  contain  an  agreement  pro- 
viding for  the  repayment  of  the 
loan  on  an  amortization  plan  by 
means  of  a fixed  number  of  annual 
or  semiannual  installments  sufficient 
to  cover,  first,  a charge  on  the  loan, 
which  shall  not  exceed  the  interest 
rate  in  the  last  series  of  farm-loan 
bonds  issued  by  the  land  bank 
making  the  loan;  second,  a charge 
for  administration  and  profits  which 
shall  not  exceed  one  per  centum  per 
annum  on  the  outstanding  loan, 
which  two  charges  combined  shall 
constitute  the  interest  rate  on  the 
mortgage ; and,  third,  such  amounts 
to  be  applied  on  the  principal  as 
will  extinguish  the  debt  within  an 
agreed  period,  not  less  than  five 
years  nor  more  than  thirty-six 
years:  Provided,  That  after  five 
years  from  the  date  upon  which  a 
loan  was  made  additional  payments 
in  sums  of  $25  or  any  multiple 
thereof  for  the  reduction  of  the 
principal  or  the  payment  of  the 
entire  principal  due  may  be  made 
on  any  regular  installment  date 
under  the  rules  and  regulations  of 
the  Federal  Farm  Loan  Board: 
And  provided  further,  That  before 
any  farm  loan  bonds  shall  have  been 
issued  by  any  land  bank  the  interest 
rate  may  be  determined  in  the 
discretion  of  said  land  bank  subject 
to  the  provisions  and  limitations 
of  this  Act. 

Provided,  That  farm  loan  bonds 
of  any  Federal  land  bank,  tendered 
or  purchased  under  the  foregoing 
two  paragraphs  to  extinguish  the 
whole  or  any  part  of  a mortgage 
loan,  shall  bear  the  rate  of  interest 
current  on  farm  loan  bonds  issued 
by  such  bank  at  the  time  such 
mortgage  loan  was  made. 

Fifth.  No  loan  on  mortgage  shall 
be  made  under  this  Act  at  a 

Third.  The 

rate  of  interest 

rate  of  interest  charged  for  such 
loans  shall  not 

exceeding  six  per  centum  per  annum, 

exceed  six  per  centum  per  annum. 

exclusive  of  amortization  payments. 

Sixth. 

Fourth. 

Such  loans  may  be  made  for  the 
following  purposes  and  for  no  other : 
(a)  To  provide  for  the  purchase  of 

Such  loans  may  be  made  for  the 
following  purposes  and  for  no  other: 
(a)  To  provide  for  the  purchase  of 

agricultural  land. 

land  for  agricultural  uses. 

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RURAL  CREDITS  BILL. 


37 


AS  PASSED  BY  SENATE. 

(b)  To  provide  for  the  purchase  of 
equipment 


AS  PASSED  BY  HOUSE. 

(b)  To  provide  for  the  purchase  of 
equipment 


, fertilizers, 

and  live  stock  necessary  for  the 
proper  and  reasonable  operation  of 
the  farm;  the  term  "equipment” 
to  be  defined  by  the  Federal  Farm 
Loan  Board. 

(c)  To  provide  buildings  and  for 
the  improvement  of  farm  lands; 
the  term  "improvement”  to  be 
defined  by  the  Federal  Farm  Loan 
Board. 

(d)  To  liquidate  indebtedness  of 
the  owner  of  the  land  mortgaged, 
existing  at  the  time  of  the  organiza- 
tion of  the  first  national  farm  loan 
association  established  in  or  for  the 
county  in  which  the  land  mortgaged 
is  situated,  or  indebtedness  subse- 
quently incurred  for  one  of  the  pur- 
poses 


and  live  stock  necessary  for  the 
proper  and  reasonable  operation  of 
the  farm;  the  term  "equipment” 
to  be  defined  by  the  Federal  Farm 
Loan  Board. 

(c)  To  provide  buildings  and  for 
the  improvement  of  farm  lands; 
the  term  "improvement”  to  be 
defined  by  the  Federal  Farm  Loan 
Board. 

(d)  To  liquidate  indebtedness  of 
the  owner  of  the  land  mortgaged, 
existing  at  the  time  of  the  organiza- 
tion of  the  first  national  farm  loan 
association  established  in  or  for  the 
county  in  which  the  land  mortgaged 
is  situated,  or  indebtedness  subse- 
quently incurred  for  one  of  the  pur- 
poses 


above 

mentioned.  mentioned. 

in  this  section. 

Seventh.  No  such  loan  shall  exceed  Fifth.  No  such  [loan  shall  exceed 

fifty  sixty 

per  centum  of  the  value  of  the  land  per  centum  of  the  value  of  the  land 
mortgaged,  mortgaged 

and  twenty  per  centum  of  the  value 
of  the  permanent,  insured  improve- 
ments thereon, 


said  value  to  be  ascertained  by  ap-  said  value  to  be  ascertained  by  ap- 
praisal, as  provided  in  section  praisal,  as  provided  m section 


nineteen 


ten 


of  this  Act. 
praisal  the 

actual 


In  making  said  ap-  of  this  act.  In  making  said  ap- 
praisal the 

value  of  the  land  for  agricultural 
purposes  shall  be  the  basis  of  ap- 
praisal and 


the 


earning  power  of  said  land  shall  be  a earning  power  of  said  land  shall  be  a 


principal 

factor.  factor. 


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RURAL  CREDITS  BILL. 


AS  PASSED  BY  SENATE. 

A reappraisal  may  lie  permitted  at 
any  time  in  the  discretion  of  the 
Federal  land  bank,  and  such  addi- 
tional loan  may  be  granted  as  such 
reappraisal  will  warrant  under  the 
provisions  of  this  paragraph. 
Whenever  the  amount  of  the  loan 
applied  for  exceeds  the  amount  that 
may  be  loaned  under  the  appraisal 
as  herein  limited,  such  loan  may  be 
granted  to  the  amount  permitted 
under  the  terms  of  this  paragraph 
without  requiring  a new  application 
or  appraisal. 

Eighth. 

No  such  loans  shall  be  made  to  any 
person  who  is  not  at  the  time, 

or  who  does  not  in  his  application 
state  his  intention 

to  become 

within  six  months 

engaged  in  the  cultivation  of  the 
farm  mortgaged.  In  case  of  the  sale 
of  the  mortgaged  land, 

the  Federal  land  bank  may,  in  its 
discretion,  declare  the  mortgage 
thereon  due  and  payable,  or  permit 
said  mortgage  to  be  assumed  by  the 
purchaser. 


In  case  of  the  death  of  the  mort- 
gagor, his  heir  or  heirs,  or  his  legal 
representative  or  representatives, 
shall  have  the  option,  within  sixty 
days  of  such  death,  to  assume  the 
mortgage 


obligations  of  the  deceased 
and  carry 

on  the  mortgaged  farm. 

Ninth. 

The  amount  of  loans  to  any  one  bor- 
rower shall  in  no  case  exceed  a 
maximum  of  $10,000 


AS  PASSED  BY  HOUSE. 

A reappraisal  may  be  permitted  at 
any  time  in  the  discretion  of  the 
Federal  land  bank,  and  such  addi- 
tional loan  may  be  granted  as  such 
reappraisal  will  warrant  under  the 
provisions  of  this  paragraph. 
Whenever  the  amount  of  the  loan 
applied  for  exceeds  the  amount  that 
may  be  loaned  under  the  appraisal 
as  herein  limited,  such  loan  may  be 
granted  to  the  amount  permitted 
under  the  terms  of  this  paragraph 
without  requiring  a new  application 
or  appraisal. 

Sixth. 

No  such  loan  shall  be  made  to  any 
person  who  is  not  at  the  time, 

or  shortly 


to  become, 


engaged  in  the  cultivation  of  the 
farm  mortgaged.  In  case  of  the  sale 
of  the  mortgaged  land, 


if  the  purchaser  is  not  eligible  to 
borrow  under  the  provision  of  this 
Act,  the  entire  amount  of  said 
loan  at  the  option  of  the  Federal 
Land  Bank  shall  become  due  and 
payable ; or  if  the  purchaser  is  eligi- 
ble to  borrow  all  excess  of  the  loans 
above  $10,000  shall  be  due  and 
payable. 

In  case  of  the  death  of  the  mort- 
gagor, his  heir  or  heirs,  or  his  legal 
representative  or  representatives, 
shall  have  the  option,  within  sixty 
days  of  such  death,  to  assume  the 
mortgage 

and  stock 

obligations  of  the  deceased 


on  the  mortgaged  farm. 

Seventh. 

The  amount  of  loans  to  any  one  bor- 
rower shall  in  no  case  exceed  a 
maximum  of  $10,000 


1 


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RURAL  CREDITS  BILL. 


39 


AS  PASSED  BY  SENATE. 

, nor  shall  any  loan  be  for  a less  sum 
than  $200. 

Tenth. 

Every  applicant  for  a loan  under  the 
terms  of  this  Act  shall  make  applica- 
tion on  a form  to  be  proscribed  for 
that  purpose  by  the  Fodoral  Farm 
Loan  Board,  and  such  applicant 
shall  state  the  objects  to  which  the 
proceeds  of  said  loan  are  to  bo 
applied,  and  shall  afford  such  other 
information  as  may  be  required. 

Eleventh.  Every  box-rower  shall 

pay  simple  interest  on  defaulted  pay- 
ments at  the  rate  of  ten  per  centum 
per  annum,  and  by  express  cove- 
nant in  his  mortgage  deed  shall 

undertake  to  pay  when  due  all 

taxes,  liens,  judgments,  or 


assessments  which  may  be  lawfully 
assessed  against  the  land  mortgaged. 

Taxes,  liens,  judgments,  or  assess- 
ments not  paid  when  due,  and  paid 
by  the  mortgagee,  shall  become  a 
part  of  the  mortgage  debt  and  shall 
bear  simple  interest  at  the  rate  of 
ten  per  centum  per  annum. 

Twelfth. 

Every  borrower  who  shall  bo  grant- 
ed a loan  under  the  provisions  of  this 
Act  shall  enter  into  an  agreement,  in 
form  and  under  conditions  to  be  pre- 
scribed by  the  Federal  Farm  Loan 
Board,  that  if  the  whole  or  any  por- 
tion of  his  loan  shall  be  expended  for 
purposes  other  than  those  specified 
in  his  original  application,  or  if  the 
borrower  shall 

fail  to  comply  with  the  terms  of  his 
application,  or 

be  in  default  in  respect  to  any  condi- 
tion 

or  covenant 

of  the  mortgago,  the  whole  of  said 
loan  shall,  at  the  option  of  the 

mortgagee, 

become  due  and  payable 


AS  PASSED  BY  HOUSE. 


Eighth. 

Every  applicant  for  a loan  under  the 
terms  of  tnis  Act  shall  make  applica- 
tion on  a form  to  be  prescribed  for 
that  purpose  by  the  Federal  Farm 
Loan  Board,  and  such  applicant 
shall  state  the  objects  to  which  the 
proceeds  of  said  loan  are  to  be 
applied,  and  shall  afford  such  other 
information  as  may  be  required. 

Ninth.  Every  borrower  shall 


undertake  to  pay  when  due  all 


premiums  on  insurance  and  also  all 
taxes  and  local 

assessments  which  may  be  lawfully 
assessed  against  the  land  mortgaged. 


Tenth. 

Every  borrower  who  shall  be  grant- 
ed a loan  under  the  provisions  of  this 
Act  shall  enter  into  an  agreement,  in 
form  and  under  conditions  to  be  pre- 
scribed by  the  Federal  Farm  Loan 
Board,  that  if  the  whole  or  any  por- 
tion of  his  loan  shall  be  expended  for 
purposes  other  than  those  specified 
in  his  original  application,  or  if  the 
borrower  shall 


be  in  default  in  respect  to  any  condi- 
tion 


of  the  mortgage,  the  whole  of  said 
loan  shall,  at  the  option  of  the 

bank  holding  same, 

become  due  and  payable 


. 


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BUBAL  CREDITS  BILL, 


40 


AS  PASSED  BY  SENATE, 
forthwith : 

Provided , That  the  borrowei  may 
use  part  of  said  loan  to  repay  any 
sum  borrowed  to  pay  for  his  stock 
in  the 


farm  loan  association,  and  the  land 
bank  holding  such  mortgage  may 
permit  said  loan  to  be  used  for  some 
other  purpose  specified  in  this  sec- 
tion. 


Funds  transmitted  to  farm  loan 
associations  by  Federal  land  banks 
to  bo  loaned  to  its  members  shall  be 
in  current  funds,  or  farm  loan 
bonds,  at  the  option  of  the  borrower. 

POWERS  OF  FEDERAL  LAND  BANKS. 

Sec.  13.  That  every  Federal  land 
bank  shall  have  power,  subject  to 
the  limitations  and  requirements  of 
this  Act — 

First.  To  issue,  subject  to  the 
approval  of  the  Federal  Farm  Loan 
Board,  and  to  sell  farm  loan  bonds 
of  the  kinds  authorized  in  this  Act. 
to  buy  the  same  for  its  own  account, 
and  to  retire  the  same  at  or  before 
maturity. 

Second.  To  invest  such  funds  as 
may  be  in  its  possession  hi  the  pur- 
chase of  qualified  first  mortgages  on 
farm  lands  situated  within  the 
Federal  land  bank  district  within 
which  it  is  organized 

or  for  which  it  is  acting. 

Third.  To  receive  and  to  deposit 
in  trust  with  the  farm  loan  registrar 
for  the  district,  to  be  by  him  held 
as  collateral,  security  for  farm  loan 
bonds,  first  mortgages  upon  farm 
land  qualified  under  section  twelve 
of  this  Act,  and  to  empower 


farm  loan  associations,  or  duly 
authorized  agents,  to  collect  and 
immediately  pay  over  to  said  land 
bank  the  dues,  interest,  amortiza- 
tion installments  and  other  sums 


AS  PASSED  BY  HOUSE. 


Provided,  That  the  borrower  may 
use  part  of  said  loan  to  repay  any 
sum  borrowed  to  pay  for  his  stock 
in  tho 

national 

farm  loan  association,  and  the  land 
bank  holding  such  mortgage  may 
permit  said  loan  to  be  used  for  some, 
other  purpose  specified  in  this  sec- 
tion. 

Eleventh.  That  no  loan  or  the. 
mortgage  securing  same  shall  bo 
impaired  or  invalidated  by  reason 
of  the  exercise  of  any  power  by  any 
Federal  land  bank  or  national  farm 
loan  association  in  excess  of  the 
powers  herein  granted  or  any  limita- 
tions thereon. 


POWERS  OF  FEDERAL  LAND  BANKS. 

Sec.  13.  That  every  Federal  land 
bank  shall  have  power,  subject  to 
the  limitations  and  requirements  of 
this  Act — 

First.  To  issue,  subject  to  the 
approval  of  the  Federal  Farm  Loan 
Board,  and  to  sell  farm  loan  bonds 
of  the  kinds  authorized  in  this  Act, 
to  buy  the  same  for  its  own  account, 
and  to  retire  the  same  at  or  before 
maturity. 

Second.  To  invest  such  funds  as 
may  be  in  its  possession  in  the  pur- 
chase of  qualified  first  mortgages  on 
farm  lands  situated  within  the 
Federal  land  bank  district  within 
which  it  is  organized 


Third.  To  receive  and  to  deposit 
in  trust  with  the  farm  loan  registrar 
for  the  district,  to  be  by  him  held 
as  collateral  security  for  farm  loan 
bonds,  first  mortgages  upon  farm 
land  qualified  under  section  twelve 
of  this  Act,  and  to  empower 

national 

farm  loan  associations,  or  duly 
authorized  agents,  to  collect  and 
immediately  pay  over  to  said  land 
bank  the  dues,  interest,  amortiza- 
tion installments  and  other  sums 


■ 


■ 

' 


. 


'■ 

’ 


■ 


' 


. 


RURAL  CREDITS  BILL. 


41 


AS  PASSED  BY  SENATE. 

payable  under  the  terms,  condi- 
tions, and  covenants  of  the  mort- 
gages and  of  the  bonds  secured 
thereby. 

Fourth.  To  receive  and  to  set 
apart  for  expenses  and  profits  the 
excess  of  interest  payments  on 
indorsed  mortgages  above  the  in- 
terest payments  on  farm  loan  bonds 
for  which  said  mortgages  are  held 
as  collateral  security,  said  excess  of 
interest  in  no  case  to  be  more  than 
one  per  centum  of  the  amount  of 
principal  remaining  unpaid  on  said 
mortgages. 

Fifth. 

To  acquire  and  dispose  of — 

(a)  Such  property,  real  or  per- 
sonal, as  may  be  necessary  or 
convenient  for  the  transaction  of 
its  business,  which,  however,  may 
be  in  part  leased  to  others  for 
revenue  purposes. 


(b) 

Parcels  of  land  acquired  in  satis- 
faction of  debts  or  purchased  at 
sales  under  judgments,  decrees,  or 
mortgages  held  by  it.  But  no 
such  bank  shall  hold  title  and 
possession  of  any  real  estate  pur- 
chased or  acquired  to  secure  any 
debt  due  to  it,  for  a longer  period 
than  five  years,  except  with  the 
special  approval  of  the  Federal 
Farm  Loan  Board  in  writing. 

Sixth. 

To  deposit  its  securities,  and  its 
current  funds  subject  to  check, 
with  any 

Federal  reserve  bank,  or  with  any 

member  bank  of  the  Federal  Re- 
serve System,  and  to  receive  in- 
terest on  the  same  as  may  be 
agreed. 

Seventh. 

To  accept  deposits  of  securities  or 
of  current  funds  from 


AS  PASSED  BY  HOUSE. 

payable  under  the  terms,  condi- 
tions, and  covenants  of  the  mort- 
gages and  of  the  bonds  secured 
thereby. 


Fourth. 

To  acquire  and  dispose  of — 

(a)  Such  property,  real  or  per- 
sonal, as  may  be  necessary  or 
convenient  for  the  transaction  of 
its  business,  which,  however,  may 
be  in  part  leased  to  others  for 
revenue  purposes. 

(b)  Parcels  of  land  mortgaged  to 
it  as  security. 

(c) 

Parcels  of  land  acquired  in  satis- 
faction of  debts  or  purchased  at 
sales  under  judgments,  decrees,  or 
mortgages  held  by  it.  But  no 
such  bank  shall  hold  title  and 
possession  of  any  real  estate  pur- 
chased or  acquired  to  secure  any 
debt  due  to  it,  for  a longer  period 
than  five  years,  except  with  the 
special  approval  of  the  Federal 
Farm  Loan  Board  in  writing. 

Fifth. 

To  deposit  its  securities,  and  its 
current  funds  subject  to  check, 
with  any 


member  bank  of  the  Federal  Re- 
serve System,  and  to  receive  in- 
terest on  the  same  as  may  be 
agreed. 

Sixth. 

To  accept  deposits  of  securities  or 
of  current  funds  from 


42504— S.  Doc.  444,  04-1 6 


national 


. 


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RURAL  CREDITS  BILL. 


42 


AS  PASSED  BY  SENATE. 

farm  loan  associations  holding  its 
shares,  but  to  pay  no  interest  on 
such  deposits. 

Eighth.  To  borrow  money,  to 
give  security  therefor,  and  to  pay 
interest  thereon. 

Ninth. 

To  buy  and  sell  United  States 
bonds. 

Tenth.  To  hold  in  trust  farm 
loan  bonds  to  an  amount  equal  to 
the  outstanding  convertible  certifi- 
cates issued  by  the  farm  loan 
associations  of  the  district  and  for 
the  redemption  thereof,  as  provided 
in  the  fourth  paragraph  of  section 
eleven  of  this  act. 


RESTRICTIONS 

OF 

FEDERAL  LAND  BANKS. 

Sec.  14.  That  no  Federal  land 
bank  shall  have  power — 

First.  To  accept  deposits  of  cur- 
rent funds  payable  upon  demand 
except  from  its  own  stockholders, 
or  to  transact  any  banking  or  other 
business  not  expressly  authorized 
by  the  provisions  of  this  act. 

Second.  To  loan  on  first  mort- 
gage except  through  national  farm 
loan  associations  as  provided  in 
section 


AS  PASSED  BY  HOUSE. 

farm  loan  associations  holding  its 
shares,  but  to  pay  no  interest  on 
such  deposits. 


Seventh. 

To  buy  and  sell  United  States 
bonds. 


Eighth.  To  charge  borrowers, 
under  rules  and  regulations  pro- 
mulgated by  the  Federal  Farm 
Loan  Board,  reasonable  fees  not 
exceeding  the  actual  cost  of  ap- 

Eraisal  and  determination  of  title. 

egal  fees  and  recording  charges 
imposed  by  law  in  the  State 
where  the  land  to  be  mortgaged  is 
located  may  also  be  included  in  the 
preliminary  costs  of  negotiating 
mortgage  loans.  The  borrower  may, 
at  his  option,  pay  such  fees  or  he 
may  require  them  to  be  advanced 
by  the  Federal  land  bank  making 
the  loan,  in  which  case  said  ex- 
penses shall  be  made  a part  of 
the  face  of  the  loan  and  paid  off  in 
amortization  payments.  Such  addi- 
tion to  the  loan  shall  not  be  per- 
mitted to  increase  said  loan  above 
the  limitations  provided  in  section 
twelve. 

RESTRICTIONS 

ON 

FEDERAL^LAND  BANKS. 

Sec.  14.  That  no  Federal  land 
bank  shall  have  power — 

First.  To  accept  deposits  of  cur- 
rent funds  payable  upon  demand 
except  from  its  own  stockholders, 
or  to  transact  any  banking  or  other 
business  not  expressly  authorized 
by  the  provisions  of  this  act. 

Second.  To  loan  on  first  mort- 
gage except  through  national  farm 
loan  associations  as  provided  in 
section 


. 


' 


. 


- 


* 


. 


RURAL  CREDITS  BILL. 


43 


AS  PASSED  BY  SENATE. 

seven 

of  this  Act,  or  through  agents  as 
provided  in  section 

seventeen . 

Third.  To  accept  any  mortgages 
on  real  estate  except  first  mortgages 
created  subject  to  all  limitations 
imposed  hy  section  twelve 

of  this  Act,  and  those  taken  as 
additional  security  for  existing 
loans. 

Fourth.  To  issue  or  obligate  itself 
for  outstanding  farm  loan  bonds  in 
excess  of  twenty  times  the  amount 
of  its  capital 

and  surplus, 

or  to  receive  from  any  national 
farm  loan  association  additional 
mortgages  when  the  principal  re- 
maining unpaid  upon  mortgages 
already  received  from  such  associa- 
tion shall  exceed  twenty  times  the 
amount  of  its  capital  stock  owned 
by  such  association. 

Fifth.  To  demand  or  receive, 
under  any  form  or  pretense,  any 
commission  or  charge  not  specifi- 
cally authorized  in  this  Act. 

This  provision  shall  also  apply  to 
joint  stock  land  banks. 

NATIONAL  FARM  LOAN  ASSOCIATIONS: 
SPECIAL  PROVISIONS. 

Sec.  15.  That 
any  person 

who  shall  become  a shareholder  of  any 

national  farm  loan  association  shall 
he  entitled  to  borrow  money  on 
farm  land  mortgage  upon  filing  his 
application  in  accordance  with  sec- 
tion 

seven 

and  otherwise  complying  with  the 
terms  of  this  Act  whenever  the 
Federal  land  bank  of  the  district 
has  funds  available  for  that  pur- 
pose, unless  said  land  bank  or  the 
Federal  Farm  Loan  Board  shall,  in 
its  discretion,  otherwise  determine. 


AS  PASSED  BY  HOUSE. 

eight 

of  this  Act,  or  through  agents  as 
provided  in  section 

fifteen. 

Third.  To  accept  any  mortgages 
on  real  estate  except  first  mortgages 
created  subject  to  all  limitations 
imposed  by  section  twelve 


Fourth.  To  issue  or  obligate  itself 
for  outstanding  farm  loan  bonds  in 
excess  of  twenty  times  the  amount 
of  its  oapital 


or  to  receive  from  any  national 
farm  loan  association  additional 
mortgages  when  the  principal  re- 
maining unpaid  upon  mortgages 
already  received  from  such  associa- 
tion shall  exceed  twenty  times  1 lie 
amount  of  its  capital  stock  owned 
by  such  association. 

Fifth.  To  demand  or  receive, 
under  any  form  or  pretense,  any 
commission  or  charge  not  specifi- 
cally authorized  in  this  Act. 


(This  matter  is  in  section  4 ol  House  bill  and  will  be 
found  on  page  29.  For  cross  reference  and  compari- 
son only  it  is  duplicated  hero.) 

Any  person 

whose  application  for  membership 
is  accepted  hy  a 

national  farm  loan  association  shall 
be  entitled  to  borrow  money  on  farm 
land  mortgage  upon  filing  his  appli- 
cation in  accordance  with  section 


eight 

and  otherwise  complying  with  the 
tarns  of  this  Act  whenever  the  Fed- 
eral land  bank  of  the  district  has 
funds  available  for  that  purpose , 
unless  said  land  bank  or  the  Federal 
Farm  Loan  Board  shall , in  its  dis- 
cretion, otherwise  determine. 


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RURAL  CREDITS  BILL. 


44 


AS  PASSED  BY  SENATE. 

Such  member 

may,  at  his  option,  pay  the  ex- 
penses for  appraisal,  examining 
title,  drawing  legal  papers^  record- 
ing and  similar  services,  or  he 
may  require  such  expenses  to  be 
advanced  by  the  Federal  land  bank 
making  the  loan,  in  which  case  said 
expenses 

may 

be  made  a part  of  the  face  of  the 
loan  and  paid  off  in  amortization 
payments.  Such  addition  to  the 
loan  shall  not  be  permitted  to 
increase  said  loan  above  the 

fifty  per  centum  limited 

in  section  twelve. 

Any  person  who  shall  borrow 
from  a Federal  land  bank  for  the 
purpose  of  purchasing  a farm  for  a 
home  under  the  provisions  of  sec- 
tion twelve  of  this  Act  may,  at  his 
option,  borrow  from  the  Federal 
land  bank  such  sum  as  is  needed  to 
pay  for  his  required  shares  of  stock 
in  the  farm  loan  association,  and 
such  sum  may  be  borrowed  in  ad- 
dition to  the  amount  permitted  to 
be  borrowed  under  the  provisions 
of  said  section  twelve. 


Subject  to  rules  and  regulations 
prescribed  by  the  Federal  Farm 
Loan  Board,  any  national  farm  loan 
association  shall  be  entitled  to  re- 
tain as  a commission  from  each  in- 
terest payment  on  any  loan  indorsed 
by  it,  not  to  exceed  one-quarter  of 
one  per  centum  semiannually  upon 
the  unpaid  principal  of  said  loan, 
any  amounts  so  retained  as  commis- 
sions to  be  deducted  from  dividends 
payable  to  such  farm  loan  associa- 
tion from  the  Federal  land  bank, 
and  to  borrow  from  the  land  bank 
of  the  district,  at  a rate  of  interest 
not  to  exceed  six  per  centum  per  an- 
num, sums  aggregating  one-fourtli 
of  its  total  stock  holdings  in  said 
land  bank. 

UNLIMITED  DEPARTMENT. 

Sec.  16.  That  the  Federal  Farm 
Loan  Board  is  authorized  and  di- 
rected to  create  in  each  Federal  land 
bank  a special  department  for  the 
issue  of  farm  loan  bonds  unlimited, 


AS  PASSED  BY  HOUSE. 


Any  person  desiring  to  secure  a 
loan  through  a national  farm  loan 
association  under  the  provisions  of 
this  Act  may,  at  his  option,  borrow 
from  the  Federal  land  hank  through 
such  association  the  sum  necessary 
to  pay  for  shares  of  stock  subscribed 
for  by  him  in  the  national  farm  loan 
association,  such  sum  to  be  made  a 
part  of  the  face  of  the  loan  and  paid 
off  in  amortization  payments:  Pro- 
vided, however,  That  such  addition  to 
the  loan  shall  not  be  permitted  to  in- 
crease said  loan  above  the  sixty  per 
centum  limited  in  section  twelve. 


. 


. 


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. 

, 


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. 


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. 


HURAL  CREDITS  BILL. 


AS  PASSED  BY  SENATE. 

to  bo  known  as  the  unlimited  depart- 
ment, and  also  to  set  apart  From 
time  to  time  for  the  purposes  of  said 
unlimited  department  such  portion 
of  the  capital  stock  of  said  bank,  not 
exceeding  one-half,  as  its  needs  may 
require.  Whenever  an  unlimited 
department  is  created  in  any  land 
bank  there  shall  also  be  established 
a limited  department,  which  shall 
carry  on  all  business  of  said  bank 
which  is  not  assigned  to  the  unlim- 
ited department. 

The  transactions  in  the  unlimited 
department  of  any  Federal  land 
bank  shall  be  kept  separate,  audits 
earnings  and  reserves  shall  consti- 
tute separate  funds,  which,  together 
with  the  capital  stock  set  apart  for 
said  department,  shall  be  primarily, 
applied  to  satisfy  its  obligations. 
The  salaries  and  expenses  of  said 
land  bank  shall  be  borne  by  said  un- 
limited department  in  the  propor- 
tion which  the  amount  of  its  out- 
standing loans  bears  to  the  total 
amount  of  the  outstanding  loans  of 
said  bank. 

Mortgages  taken  by  the  unlim- 
ited department,  and  those  taken  by 
the  limited  department,  shall  be  re- 
spectively segregated  and  handled 
separately  for  all  purposes.  All 
mortgages  belonging  to  the  unlim- 
ited department  of  any  land  bank, 
whether  or  not  the  same  have  been 
pledged  with  the  farm  loan  registrar, 
shall  be  security  for  the  payment  of 
every  farm  loan  bond  unlimited  is- 
sued by  said  land  bank;  and  all 
mortgages  belonging  to  the  limited 
department  of  any  land  bank, 
whether  or  not  the  same  have  been 
pledged  with  the  farm  loan  registrar, 
shall  be  security  for  the  payment  of 
every  farm  loan  bond  limited  issued 
by  said  land  bank. 

AGENTS  OF  FEDERAL  LAND  BANKS. 

Sec.  17. 

That  whenever 


AS  PASSED  BY  HOUSE. 


AGENTS  OF  FEDERAL  LAND  BANKS. 

Sec.  15. 

That  whenever 


after  this  Act  shall  have  been  in 
effect  one  year 

it  shall  appear  to  the  Federal  Farm  it  shall  appear  to  the  Federal  Farm 
Loan  Board  that  national  farm  loan  Loan  Board  that  national  farm  loan 
associations  have  not  been  formed,'  associations  have  not  been  formed, 
and  arc  not  likely  to  be  formed,  in  and  are  not  likely  to  be  formed,  in 
any  locality,  because  of  an}r  locality,  because  of 


some 


. 

■:>  . ■;  •;  '.i’i  ••  -i  . 

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RURAL  CREDITS  BILL. 


46 


AS  PASSED  BY  SENATE. 

peculiar  local  conditions,  said  board 
may,  in  its  discretion,  authorize 
Federal  land  banks  to  make  loans  on 
farm  lands  through  agents  approved 
by  said  board. 

Such  loans  shall  be  subject  to  the 
same  conditions  and  restrictions  as 
if  the  same  wore  made  through 


farm-loan  associations,  and  each 
borrower  shall  contribute  five  per 
centum  of  the  amount  of  nis 
loan  to  the  capital  of  the  Federal 
land  bank,  and  shall  become  the 
owner  of  as  much  capital  stock  of 
the  land  bank  as  such  contribution 
shall  warrant. 

No 

other  agent 

than  a duly  incorporated  bank,  trust 
company 

or 

mortgage 


institution,  chartered  by  the  Fed- 
eral Government  or 

by 

the  State  in  which  it  has  its  principal 
office,  shall  be  employed  under  the 
provisions  of  this  section. 

Federal  land  banks  may  pay  to 
such  agents 


not  to  exceed  one-half  of  one  per 
centum  per  annum  upon  the  unpaid 
principal  of  said  loan, 

such  payment  to  be  deducted  from 
dividends  payable  to  the  borrower 
on  his  stock  in  the  Federal  land 
bank. 

Actual  expenses  paid  by  borrow- 
ers for  appraisal,  examining  title, 
drawing  legal  papers,  recording,  and 
similar  services,  may  be  added  to  the 
face  of  the  loan  and  paid  off  in  amor- 
tization payments.  Such  addition 


AS  PASSED  BY  HOUSE. 

peculiar  local  conditions,  said  board 
may,  in  its  discretion,  authorize 
Federal  land  banks  to  make  loans  on 
farm  lands  through  agents  approved 
by  said  board. 

Such  loans  shall  be  subject  to  the 
same  conditions  and  restrictions  as 
if  the  same  wore  made  through 

national 

farm-loan  associations,  and  each 
boiTower  shall  contribute  five  per 
centum  of  the  amount  of  his 
loan  to  the  capital  of  the  Federal 
land  bank,  and  shall  become  the 
owner  of  as  much  capital  stock  of 
the  land  bank  as  such  contribution 
shall  warrant. 

No 

agent  other 

than  a duly  incorporated  bank,  trust 
company, 


mortgage 

company,  or  savings 

institution,  chartered  by  the  Fed- 
eral Government  or 


the  State  in  which  it  has  its  principal 
office,  shall  be  employed  under  the 
provisions  of  this  section. 

Federal  land  banks  may  pay  to 
such  agents 

the  actual  expense  of  appraising 
the  land  offered  as  security  for  a 
loan,  examining  and  certifying  the 
title  thereof,  and  making,  executing, 
and  recording  the  mortgage  papers, 
and  in  addition  may  allow  said 
agents 

not  to  exceed  one-half  of  one  per 
centum  per  annum  upon  the  unpaid 
principal  of  said  loan. 


. 1 , ■ i 


- 


• • . ■ ' ' 

. 

- 

. 


. 

- 


* 

. 

' 


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. 

* 


. 


. 


RURAL  CREDITS  BILL. 


47 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 

to  the  loan  shall  not  bo  permitted  to 
increase  said  loan  above  the  fifty  per 
centum  limited  in  section  twelve. 

Actual  expenses  paid  to  agents 
under  the  provisions  of  this  section 
may  be  added  to  the  face  of  the  loan 
and  paid  off  in  amortization  pay- 
ments as  provided  in  subsection 
eight  of  section  thirteen  of  this  Act. 


Said  agents,  when  required  by  the 
Federal  land  banks,  shall  collect  and 
forward  to  such  banks  without 
charge  all  interest  and  amortization 
payments  on  loans  indorsed  by 
them. 

Any  agent  negotiating  any  such 
loan  shall  indorse  the  same  and 
become  liable  for  the  payment 
thereof,  and  for  any  default  by 
the  mortgagor,  on  the  same  terms 
and  under  the  same  penalties  as  if 
the  loan  had  been  originally  made 
by  said  agent  as  principal  and  sold 
by  said  agent  to  said  land  bank, 
but  the  aggregate  of  the  unpaid 
principal  of  mortgage  loans  received 
from  any  such  agent  shall  not  ex- 
ceed ten  times  its  capital  and 
surplus. 


If  at  any  time  the  district  repre- 
sented by  any  agent  under  the  pro- 
visions of  this  section  shall,  in  the 
judgment  of  the  Federal  Farm  Loan 
Board,  be  adequately  served  by 
national  farm  loan  associations,  no 
further  loans  shall  be  negotiated 
therein  by  agents  under  this  section. 


Said  agents,  when  required  by  the 
Federal  land  banks,  shall  collect  and 
forward  to  such  banks  without 
charge  all  interest  and  amortization 
payments  on  loans  indorsed  by 
them. 


Every  agent  negotiating  any  such 
loan  shall  make  a report  and  an 
appraisal  of  the  land  upon  which 
application  is  made  for  the  loan  on 
blanks  furnished  by  the  Federal 
land  bank,  and  such  report  and 
appraisal  shall  be  referred  to  an 
appraiser  as  required  in  section  ten 
of  this  Act,  and  no  loan  shall  be 
made  by  the  land  bank  unless  the 
report  of  the  appraiser  is  favorable. 
Every  loan  made  under  the  pro- 
visions of  this  section  shall  be  made 
to  the  applicant  upon  such  forms 
and  under  such  regulations  as  shall 
be  prescribed  by  the  Federal  Farm 
Loan  Board. 

If  at  any  time  the  district  repre- 
sented by  any  agent  under  the  pro- 
visions of  this  section  shall,  hi  the 
judgment  of  the  Federal  Farm  Loan 
Board,  be  adequately  served  by 
national  farm  loan  associations,  no 
further  loans  shall  be  negotiated 
therein  by  agents  under  this  section. 


sS 


* 


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RURAL  CREDITS  BILL. 


48 


AS  PASSED  BY  SENATE. 

DIVISION  C. 

JOINT  STOCK  LAND-BANKS. 

Sec.  18. 

That  corporations,  to  bo  known 
as  joint  stock  land  banks,  for  carry- 
ing on  the  business  of  lending  on 
farm  mortgage  security  and  issuing 
farm  loan  bonds,  may  be  formed 
by  any  number  of  natural  persons 
not  less  than  ten.  They  shall  be 
organized  subject  to  the  require- 
ments and  under  the  conditions  set 
forth  in  section 

four 

of  this  Act,  so  far  as  the  same  may 
be  applicable:  Provided,  That  the 
board  of  directors  of  every  joint 
stock  land  bank 

may 

consist  of 
more 

than  five  members. 

Shareholders  of  every  joint  stock 
land  bank  organized  under  this  Act 
shall  be  held  individually  responsi- 
ble, equally  and  ratably,  and  not 
one  for  another,  for  all  contracts, 
debts,  and  engagements  of  such 
bank  to  the  extent  of  the  amount  of 
stock  owned  by  them  at  the  par 
value  thereof,  in  addition  to  the 
amount  paid  in  and  represented  by 
their  shares. 

Except  as  otherwise  provided, 
joint  stock  land  banks  shall  be  sub- 
ject to  all  the  restrictions  and  con- 
ditions imposed  on  Federal  land 
banks  by  this  Act,  so  far  as  such  re- 
strictions and  conditions  are  appli- 
cable: Provided,  however,  That  the 
Government  of  the  United  States 
shall  not  purchase  or  subscribe  for 
any  of  the  capital  stock  of  any  sucli 
bank;  and  each  shareholder  of  any 
such  bank  shall  have  the  same  vot- 
ing privileges  as  holders  of  shares  in 
national  banking  associations. 

No  joint  stock  land  bank  shall 
have  power  to  issue  or  obligate  itself 
for  outstanding  farm  loan  bonds  in 
excess  of  fifteen  times  the  amount  of 
its  capital  and  surplus,  or  to 

receive 


AS  PASSED  BY  HOUSE. 


JOINT  STOCK  LAND  BANKS. 

Sec.*  16. 

That  corporations,  to  be  known 
as  joint  stock  land  banks,  for  carry- 
ing on  the  business  of  londing  on 
farm  mortgage  security  and  issuing 
farm  loan  bonds,  may  be  formed 
by  any  number  of  natural  persons 
not  less  than  ten.  They  shall  be 
organized  subject  to  the  require- 
ments and  under  the  conditions  set 
forth  in  section 

five 

of  this  Act,  so  far  as  the  same  may 
be  applicable:  Provided,  That  the 
board  of  directors  of  every  joint 
stock  land  bank 

shall 

consist  of 
not  less 

than  five  members. 

Shareholders  of  every  joint  stock 
land  bank  organized  under  this  Act 
shall  be  held  individually  responsi- 
ble, equally  and  ratably,  and  not 
one  for  another,  for  all  contracts, 
debts,  and  engagements  of  such 
bank  to  the  extent  of  the  amount  of 
stock  owned  by  them  at  the  par 
value  thereof,  in  addition  to  the 
amount  paid  in  and  represented  by 
their  shares. 

Except  as  otherwise  provided, 
joint  stock  land  banks  shall  be  sub- 
ject to  all  the  restrictions  and  con- 
ditions imposed  on  Federal  land 
banks  by  this  Act,  so  far  as  such  re- 
strictions and  conditions  are  appli- 
cable: Provided,  however,  That  the 
Government  of  the  United  States 
shall  not  purchase  or  subscribe  for 
any  of  the  capital  stock  of  any  such 
bank;  and  each  shareholder  of  any 
such  bank  shall  have  the  same  vot- 
ing privileges  as  holders  of  shares  in 
national  banking  associations. 

No  joint  stock  land  bank  shall 
have  power  to  issue  or  obligate  itself 
for  outstanding  farm  loan  bonds  in 
excess  of  fifteen  times  the  amount  of 
its  capital  and  surplus,  or  to 

accept 

deposits 


deposits 


. 'Illo  •. 


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. 


. 


. 

I 


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or  to  transact  any  banking  or  other 
business  not  expressly  authorized  by 
the  provisions  of  this  Act. 

No  joint  stock  land  bank  shall  be 
authorized  to  do  business  until  cap- 
ital stock  to  the  amount  of  at  least 
$250,000  has  been  subscribed 

, one-half  thereof 

paid  in  cash  and 

the  balance  subject  to  call  by  the 
board  of  directors,  and 

a charter  has  been  issued  to  it  by  the 
Federal  Farm  Loan  Board. 

In  States  having  populations  ex- 
ceeding two  millions,  the  capital 
stock  of  joint  stock  land  banks  shall 
be  not  less  than  $500,000. 

No  joint  stock  land  bank  shall  is- 
sue any  bonds  until  after  the  capital 
stock  is  entirely  paid  up. 

Farm  loan  bonds  issued  by  joint 
stock  land  banks  shall  be  so  en- 
graved as  to  be  readily  distinguished 
in  form  and  color  from  farm  loan 
bonds  issued 

under  this  Act 

by  Federal  land  banks,  and  shall 
otherwise  bear  such  distinguishing 
marks  as  the  Federal  Farm  Loan 
Board  shall  direct. 

Joint  stock  land  banks  shall  not 
be  subject  to  the  provisions  of 

sections  twelve,  twenty,  or  twenty- 
three 

of  this  Act  as  to  interest  rates  on 
mortgage  loans  or 

farms 

loan  bonds,  nor  to  the  provisions  of 

the  paragraphs  designated  first, 
sixth,  eighth,  ninth,  and  twelfth 

of  section  twelve  as  to  restrictions 
on  mortgage  loans:  Provided,  how- 
ever, That  no  loans  shall  be  made 

in  excess  of  fifty  per  centum  of  the 
appraised  value  of  the  mortgaged 
lands,  and  all  loans  shall  be 

secured  by  first  mortgages  on  farm 
42564— S.  Doc.  444,  64-1 7 


RURAL  CREDITS  BILL. 


49 


of  current  funds  payable  upon 
demand 

or  to  transact  any  banking  or  other 
business  not  expressly  authorized  by 
the  provisions  of  this  Act. 

No  joint  stock  land  bank  shall  be 
authorized  to  do  business  until  cap- 
ital stock  to  the  amount  of  at  least 
$250,000  has  been  subscribed 

and 

paid  in  cash  and 


a charter  has  been  issued  to  it  by  the 
Federal  Farm  Loan  Board. 


Farm  loan  bonds  issued  by  joint 
stock  land  banks  shall  be  so  en- 
graved as  to  be  readily  distinguished 
in  form  and  color  from  farm  loan 
bonds  issued 


by  Federal  land  banks,  and  shall 
otherwise  bear  such  distinguishing 
marks  as  the  Federal  Farm  Loan 
Board  shall  direct. 

Joint  stock  land  banks  shall  not 
be  subject  to  the  provisions  of 

subsection  (b)  of  section  four 


of  this  Act  as  to  interest  rates  on 
mortgage  loans  or 

farm 

loan  bonds,  nor  to  the  provisions  of 

l 

subsections  one,  four,  six,  seven,  * 

and  ten 

of  section  twelve  as  to  restrictions 
on  mortgage  loans:  Provided,  how- 
ever, That  no  loans  shall  be  made 

which  are  not 


secured  by  first  mortgages  on  farm 


■ 

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RURAL  CREDITS  BILL. 


50 


AS  PASSED  BY  SENATE. 


AS  PASSED  BY  HOUSE. 


land 

within  the  State  in  which  such  joint 
stock  land  bank  has  its  principal 
office 

or  within  some  State  contiguous  to 
such  State. 


Joint  stock  land  banks  shall  in  no 
case  charge  interest  on  farm  loans 
exceeding  by  more  than  one  per 
centum  the  rate  of  interest  estab- 
lished for  the  last  scries  of  farm  loan 
bonds  issued  by  them. 


Each  joint  stock  land  bank  organ- 
ized under  this  Act  shall  have  au- 
thority to  issue  bonds  based  upon 
mortgages  taken  by  it  in  accordance 
with  the  terms  of  this  Act.  Such 
bonds  shall  be  in  form  prescribed  by 
the  Federal  Farm  Loan  Board,  and 
it  shall  be  stated  in  such  bonds  that 
such  bank  is  organized  under  section 

eighteen 

of  this  Act,  is  under  Federal  super- 
vision, and  operates  under  the  pro- 
visions of  this  Act. 

Farm  loan  bonds  issued  by  joint 
stock  land  banks  shall  be  called 
joint  stock  bonds. 

APPRAISAL. 


Sec.  19.  That  whenever  an  appli- 
cation for  a mortgage  loan  is  made 
to 

a division  A or  a division  B . 

association,  it  shall  be  first  re- 
ferred to  the  loan  committee  pro- 
vided for  in  section 

seven 

of  this  Act.  Said  loan  committee 
shall  examine  the  land  which  is 
offered  as  security  for  the  desired 
loan  and  shall  make  a detailed 


lands 

within  the  State  in  which  such  joint 
stock  land  bank  has  its  principal 
office 


Such  joint  stock  land  banks  shall  be 
subject  to  all  other  restrictions  on 
mortgage  loans  imposed  on  Federal 
land  banks  in  section  twelve  of  this 
Act. 

Joint  stock  land  banks  shall  in  no 
case  charge  interest  on  farm  loans 
exceeding  by  more  than  one  per 
centum  the  rate  of  interest  estab- 
lished for  the  last  series  of  farm  loan 
bonds  issued  by  them. 

Joint  stock  land  banks  shall  in  no 
case  demand  or  receive,  under  any 
form  or  pretense,  any  commission  or 
charge  not  specifically  authorized  in 
this  Act. 

Each  joint  stock  land  bank  organ- 
ized under  this  Act  shall  have  au- 
thority to  issue  bonds  based  upon 
mortgages  taken  by  it  in  accordance 
with  the  terms  of  this  Act.  Such 
bonds  shall  be  in  form  prescribed  by 
the  Federal  Farm  Loan  Board,  and 
it  shall  be  stated  in  such  bonds  that 
such  bank  is  organized  under  section 

sixteen 

of  this  Act,  is  under  Federal  super- 
vision, and  operates  under  the  pro- 
visions of  this  Act. 


APPRAISAL. 

This  section,  number  10  in  House  bill,  will  be  found 
on  page  32.  For  cross  reference  and  comparison  only 
it  is  duplicated  here. 

Sec.  10.  That  whenever  an  appli- 
cation for  a mortgage  loan  is  made 
to 

a national  farm  loan 

association,  it  shall  he  first  referred 
to  the  loan  committee  provided  for 
in  section 

eight 

of  this  Act.  Said  loan  committee 
shall  examine  the  land  which  is 
offered  as  security  for  the  desired 
loan  and  shall  make  a detailed 


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RURAL  CREDITS  BILL. 


51 


AS  PASSED  BY  SENATE. 

written  report  signed  by  all  throo 
members,  giving  the  appraisal  of 
said  land  as  determined  by  them, 
and  such  other  information  as  may 
be  required  by  rides  and  regulations 
to  be  prescribed  by  the  Federal 
Farm  Loan  Board.  No  loan  shall 
be  approved  by  the  directors  unless 
said  Loan  committee  agrees 

unanimously 

upon  a favorable  report. 

The  written  report  of  said  loan 
committee  shall  be  submitted  to  the 
Federal  land  bank, 

together  with  the  application  for 
the  loan, 

and  the  directors  of  said  land  bank 
shall  examine  said  written  report 
when  they  pass  upon  the  loan  applica- 
tion which  it  accompanies,  but  they 
shallnot  be  bound  by  said  appraisal. 

Before  any  mortgage  loan  is  made 
by  any  Federal  land  bank,  or  joint 
stock  land  bank,  it  shall  refer  the 
application  and  written  report  of 
the  loan  committee  to  one  or  more 
of  the 

land  bank 

appraisers  appointed  under  the  au- 
thority of  section  three  of  this  Act, 
and  such  appraiser  or  appraisers  shall 
investigate  and  make  a written  report 
upon  the  land  offered  as  security  for 
said  loan.  No  such  loan  shall  be 
made  by  said  land  bank  unless  said 
written  report  is  favorable. 

Whenever  any  Federal  land  bank, 
or  joint  stock  land  bank,  shall  desire 
to*  issue  farm  loan  bonds  under  the 
provisions  of  section  twenty-two  of 
this  Act,  the  Federal  Farm  Loan 
Board  shall  refer  the  application  of 
such  land  bank  to  one  or  more  of 
the  special  appraisex-s  appointed 
under  the  authority  of  section  three 
of  this  Act.  Such  special  appraiser 
or  appraisers  shall  make  such  exam- 
ination and  appraisal  of  the  mort- 
gages offered  as  collateral  security 
tor  such  bonds  as  the  Federal  Farm 
Loan  Board  shall  direct,  and  shall 
make  a written  report  to  said  board. 

No  issue  of  farm  loan  bonds  shall  be 
authorized  unless  the  Federal  Farm 
Loan  Board  shall  approve  such  issue 
in  wilting. 

Forms  for  appraisal  repoi’ts  for 
farm  loan  associations  and  land 


AS  PASSED  BY  HOUSE. 

written  report  signed  by  all  three 
members,  giving  the  appraisal  of 
said  land  as  determined  by  them 
and  such  other  information  as  may 
be  refaired  by  rules  and  regulations 
to  be  prescribed  by  the  Federal 
Farm  Loan  Board.  No  loan  shall 
be  approved  by  the  directors  unless 
said  loan  committee  agrees 


upon  a favorable  report. 

The  written  report  of  said  loan 
committee  shall  be  submitted  to 
the  Federal  land  bank, 


and  the  directors  of  said  land  bank 
shall  examine  said  written  report 
when  they  pass  upon  the  loan  applica- 
tion which  it  accompanies,  but  they 
shall  not  be  bound  by  said  appraisal. 

Before  any  mortgage  loan  is  made 
by  any  Federal  land  bank,  or  joint- 
stock  land  bank,  ii  shall  refer  the 
application  and  written  report  of 
the  loan  committee  to  one  or  more 
of  the 


appraisers  appointed  under  the  au- 
thority of  section  three  of  this  Act, 
and  such  appraiser  or  appraisers  shall 
investigate  and  make  a written  report 
upon  the  land  offered  as  security  for 
said  loan.  No  such  loan  shall  be 
made  by  said  land  bank  unless  said 
written  report  is  favorable. 


This  paragraph  is  identical  with  matter  at  the  end  of 
Sec.  17  in  the  House  bill  and  can  be  found  on  page  56. 


. 


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RURAL  CREDITS  BILL. 


AS  PASSKI)  BY  SENATE. 

banks  shall  be  prescribed  by  the 
Federal  Farm  Loan  Board. 

Land  bank  appraisers  and  special 
appraisers  shall  make  such  exam- 
inations and  appraisals  and  con- 
duct such  investigations,  concern- 
ing farm  loan  bonds  and  first  mort- 
gages, as  the  Federal  Farm  Loan 
Board  shall  direct. 

No  borrower  under  this  Act  shall 
be  eligible  as  an  appraiser  under 
this  section,  but  borrowers  may  act 
as  members  of  a loan  committee  in 
any  case  where  they  are  not  per- 
sonally interested  in  the  loan  under 
consideration.  When  any  member 
of  a loan  committee  or  of  a board  of 
directors  is  interested,  directly  or 
indirectly,  in  a loan,  a majority 
of  the  board  of  directors  shall  ap- 
point a substitute  to  act  in  his  place 
in  passing  upon  such  loan. 


POWERS  OF  FEDERAL  FARM  LOAN 
BOARD. 


Sec.  20.  That  the  Federal  Farm 
Loan  Board  shall  have  power — 

(a)  To  organize  and  charter  Fed- 
eral land  banks, 


national  farm  loan  associations,  and 
joint  stock  land  banks 


subject  to  the  provisions  of  this 
Act, 

and  in  its  discretion  to  authorize 
them  to  increase  their  capital  stock. 

(b)  To  review  and  alter  at  its 
discretion  the  rate  of  interest  to  be 
charged  by  Federal  land  banks  for 
loans  made  by  them  under  the  pro- 
visions of  this  Act,  said  rates  to  be 
uniform  so  far  as  practicable. 

(c)  To  grant  or  refuse  to  Federal 
land  banks,  or  joint  stock  land 
banks,  authority  to  make  any 
specific  issue  of  farm  loan  bonds. 

(d)  To  make  rules  and  regula- 
tions respecting  the  charges  made 
to  borrowers  on  loans  under  this 
Act  for  expenses  in  appraisal, 

examining 


AS  PASSED  BY  HOUSE. 


No  borrower  under  this  Act  shall 
be  eligible  as  an  appraiser  under 
this  section , but  borrowers  may  act 
as  members  of  a,  loam  committee  in 
any  case  where  they  are  not  person- 
ally interested  in  the  loan  under 
consideration.  When  any  member 
of  a loan  committee  or  of  a board  of 
directors  is  interested,  directly  or 
indirectly,  in  a loan,  a majority  of 
the  board  of  directors  of  any  na- 
tional farm  loan  association  shall 
appoint  a substitute  to  act  in  his 
place  in  passing  upon  such  loan. 

POWERS  OF  FEDERAL  FARM  LOAN 
BOARD. 

This  section,  number  4 in  House  bill,  will  be  found 
on  page  9.  For  cross  reference  and  comparison  only 
it  is  inserted  here. 

Sec.  4 • That  the  Federal  Farm 
Loan  Board  shall  have  power — 

(a)  To  organize  and  charter  Fed- 
eral land  banks, 

and  to  charter 

national  farm  loa  n associations,  and 
joint  stock  land  banks,  as  herein- 
after defined, 

subject  to  the  provisions  of  this 
Act 


( b ) To  review  and  alter  at  its 
discretion  the  rate  of  interest  to  be 
charged  by  Federal  land  banks  for 
loans  made  by  them  under  the  pro- 
visions of  this  Act,  said  rates  to  be 
uniform  so  far  as  practicable. 

( c ) To  grant  or  refuse  to  Federal 
land  banks,  or  joint  stock  land, 
banks,  authority  to  make  any 
specific  issue  of  farm  loan  bonds. 

(d)  To  make  rules  and  regulations 
respecting  the  charges  made  to  bor- 
rowers on  loans  under  this  Act  for 
expenses  in  appraisal, 

determination  of  title, 


title, 


. 


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. 


■ 


. 


■ 


■ 

- 

. 


rural  credits  bill. 


53 


AS  PASSED  BY  SENATE, 
drawing  legal  papors, 
recording, 

and  similar  servicos. 


(e)  To  require  reports  and  state- 
ments of  condition  and  to  make  ex- 
aminations of  all  banks  or  associ- 
ations doing  business  under  the 
provisions  of  this  Act. 

(f)  To  prescribe  the  form  and 
terms  of  farm  loan  bonds,  and  the 
form,  terms,  and  penal  sums  of  all 
surety  bonds  required  under  this 
Act  and  of  such  other  surety  bonds 
as  they  shall  deem  necessary,  such 
surety  bonds  to  cover  financial  loss 
as  well  as  faithful  performance  of 
duty. 

(g)  To  require  Federal  land  banks 
to  pay  forthwith  to  any  Federal 
land  bank  then-  equitable  propor- 
tion of  any  sums  advanced  by  said 
land  bank  to  pay  the  coupons  of  any 
other  land  bank,  basing  said  required 
payments  on  the  amount  of  farm 
loans  issued  by  each  land  bank  and 
actually  outstanding  at  the  time  of 
such  requirement. 


AS  PASSED  BY  HOUSE. 


and 

recording. 


(e)  To  prescribe  the  form  and 
terms  of  farm  loan  bonds,  and  the 
form,  terms,  and  penal  sum  of  all 
surety  bonds  required  under  this 
Act  and  of  such  other  surety  bonds 
as  they  shall  deem  necessary,  such 
surety  bonds  to  cover  financial  loss 
as  well  as  faithful  performance  of 
duty. 


if)  To  suspend  or  to  remove  for 
cause  any  district  director  or  any 
registrar,  appraiser,  examiner,  or 
other  official  appointed  by  said 
board  under  authority  of  section 
three  of  this  Act;  the  cause  of  such 
suspension  or  removal  to  be  com- 
municated forthwith  in  writing  by 
the  Federal  Farm  Loan  Board  to 
the  person  suspended  or  removed, 
and  m case  of  a district  director  to 
the  proper  farm  land  bank. 

(g)  To  make  application  to  the 
Secretary  of  the  Treasury  for  tem- 
porary deposits,  as  follows: 

If  at  any  time  a Federal  land 
bank,  the  fair  value  of  whose  assets 
is  at  least  equal  to  the  total  of  its 
liabilities,  shall  find  that  it  may 
soon  be  without  funds,  immediately 
available,  sufficient  to  meet  its  obli- 
gations with  respect  to  the  payment, 
when  required,  of  the  principal  of 
or  the  interest  on  bonds  issued  under 
this  Act,  or  of  both  principal  and 
interest,  it  may  make  application  to 
the  Federal  Farm  Loan  Board  for  a 
temporary  deposit  by  the  Secretary 
of  the  Treasury  of  the  sum  needed 
to  make  such  payment  during  the 
period  for  which  its  funds,  immedi- 
ately available,  will  be  insufficient , 
setting  forth  in  its  application  such 
information  as  the  Federal  Farm 
Loan  Board  may  require.  If  after 


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RURAL  CREDITS  BILL. 


54 


AS  PASSED  BY  SENATE. 


(h)  To  exercise  general  super- 
visory authority  over  the  Federal 
land  banks,  the  national  farm  loan 
associations,  and  the  joint  stock 
land  hanks  herein  provided  for. 

(i)  To  exercise  such  incidental 
powers  as  shall  he  necessary  or 
requisite  to  fulfill  their  duties  and 
carry  out  the  purposes  of  this  Act. 

APPLICATIONS  FOR  FARM  LOAN 
BONDS. 

Sec.  21. 

That  any 
Federal 
land  bank, 

or  joint  stock  land  bank, 

which  shall  have  voted  to  issue  farm 
loan  bonds 

or  joint  stock  bonds 

under  this  Act,  shall  make  written 
application  to  the  Federal  Farm 
Loan  Board,  through  the  farm  oan 


AS  PASSED  BY  HOUSE. 

investigation  the  Federal  Farm 
Loan  Board  approves  said  applica- 
tion it  shall  give  notice  thereof  to 
the  Secretary  of  the  Treasury , stat- 
ing the  sum  required,  the  period  for 
which  needed,  and  such  other  facts 
as  may  he  necessary.  Thereupon 
the  Secretary  of  the  Treasury  may 
deposit  such  sum,  or  from  time  to 
time  so  much  thereof  as  may  be  re- 
quired, with  said  Federal  land  hank, 
to  he  expended  under  the  direction 
of  the  Federal  Farm,  Loan  Board  for 
the  purposes  for  which  the  applica- 
tion for  such  deposit  was  approved. 
Any  sum  so  deposited  shall  hear  a 
rate  of  interest  fixed  by  the  Secre- 
tary of  the  Treasury,  not  to  exceed 
the  current  rate  charged  for  other 
Government  deposits,  and  shall  he 
repaid  as  may  he  required,  hut  not 
later  than  the  expiration  of  the 
period  fixed  by  the  Secretary  of  the 
Treasury.  To  secure  the  repay- 
ment of  any  such  deposit,  together 
with  the  payment  of  the  interest 
thereon,  said  Federal  land  hank 
shall  issue  to  the  Secretqry  of  the 
Treasury  its  certificate  of  indebted- 
ness: Provided,  That  the  aggregate 
of  all  such  deposits  in  any  one 
Federal  land  hank  hy  the  Secretary 
of  the  Treasury  shall  not  exceed,  in 
any  fiscal  year  or  at  one  time,  the 
sum  of  $500,000. 


(h)  To  exercise  such  incidental 
powers  as  shall  he  necessary  or 
requisite  to  fulfill  their  duties  and 
carry  out  the  purposes  of  this  Act. 

APPLICATIONS  FOR  FARM  LOAN 
BONDS. 

Sec.  17. 

That  any 


land  bank, 


which  shall  have  voted  to  issue  farm 
loan  bonds 


under  this  Act,  shall  make  written 
application  to  the  Federal  Farm 
Loan  Board,  through  the  farm  loan 


' 

. 

. 


■ 

. 

• 

1 

. 

. 


. 


RURAL  CREDITS  BILL. 


56 


AS  PASSED  BY  SENATE. 

registrar  of  the  district,  for  approval 
of  such  issue.  With  said  applica- 
tion said  land  bank  shall  tender  to 
said  farm  loan  registrar  as  collateral 
security  first  mortgages  on  farm 
lands  qualified  under  the  provisions 
of  section  twelve, 


or  section 
seventeen 

of  this  Act,  or  United  States  Gov- 
ernment bonds,  not  less  in  aggre- 
gate amount  than  the  sum  of  the 
bonds  proposed  to  be  issued.  Said 
bank  shall  furnish  with  such  mort- 
gages a schedule  containing  a de- 
scription thereof  and  such  further 
information  as  may  be  prescribed 
by  the  Federal  Farm  Loan  Board. 

Upon  receipt  of  such  application 
said  farm  loan  registrar  shall  verify 
said  schedule  and  shall  transmit 
said  application  and  said  schedule 
to  the  Federal  Farm  Loan  Board, 
giving  such  further  information 
pertaining  thereto  as  he  may  pos- 
sess. The  Federal  Farm  Loan 
Board  shall  forthwith  cause  one  or 
more 

special  appraisers 

to  make  such  investigation  and  ap- 
praisement of  the  securities  tendered 
as  it  shall  deem  wise,  and  upon  re- 
ceiving a 


report  from  said 
special  appraiser 
or 

appraisers 

it  shall  grant  in  whole  or  in  part,  or 
reject  entirely,  such  application. 

The  Federal  Farm  Loan  Board 
shall  promptly  transmit  its  decision 
as  to  any  issue  of  farm  loan  bonds 
to  the  land  bank  applying  for  the 
same  and  to  the  farm  loan  registrar 
of  the  district-  Said  registrar  shall 
furnish,  in  writing,  such  informa- 
tion regarding  any  issue  of  farm 
loan  bonds  as  the  Federal  Farm 
Loan  Board  may  at  any  time 
require. 


AS  PASSED  BY  HOUSE. 

registrar  of  the  district,  for  approval 
of  such  issue.  With  said  applica- 
tion said  land  bank  shall  tender  to 
said  farm  loan  registrar  as  collateral 
security  first  mortgages  on  farm 
lands  qualified  under  trie  provisions 
of  section  twelve, 

section  fifteen, 

or  section 

sixteen 

of  this  Act,  or  United  States  Gov- 
ernment bonds,  not  less  in  aggre- 
gate amount  than  the  sum  of  the 
bonds  proposed  to  be  issued.  Said 
bank  shall  furnish  with  such  mort- 
gages a schedule  containing  a de- 
scription thereof  and  such  further 
information  as  may  be  prescribed 
by  the  Federal  Farm  Loan  Board. 

Upon  receipt  of  such  application 
said  farm  loan  registrar  shall  verify 
said  schedule  and  shall  transmit 
said  application  and  said  schedule 
to  the  Federal  Farm  Loan  Board, 
giving  such  further  information 
pertaining  thereto  as  he  may  pos- 
sess. The  Federal  Farm  Loan 
Board  shall  forthwith  cause  one  or 
more 

examiners 

to  make  such  investigation  and  ap- 
praisement of  the  securities  tendered 
as  it  shall  deem  wise,  and  upon  re- 
ceiving a 

written 

report  from  said 

examiner 

or 

examiners 

it  shall  grant  in  whole  or  in  part,  or 
reject  entirely,  such  application. 

The  Federal  Farm  Loan  Board 
shall  promptly  transmit  its  decision 
as  to  any  issue  of  farm  loan  bonds 
to  the  land  bank  applying  for  the 
same  and  to  the  farm  loan  registrar 
of  the  district.  Said  registrar  shall 
furnish,  in  writing,  such  informa- 
tion regarding  any  issue  of  farm 
loan  bonds  as  the  Federal  Farm 
Loan  Board  may  at  any  time 
require. 


V 


- 


. 

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. 


. ' 


. 

■ 


. 

. 


■ 

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RURAL  CREDITS  BILL. 


56 


AS  PASSED  BY  SENATE. 


(This  paragraph  is  identical  with  matter  near  tho 
end  of  Sec.  19  of  Senate  bill  and  is  on  page  51.) 


ISSUE  OF  FARM  LOAN  BONDS. 

Sec.  22. 

That  whenever  any  farm  loan 
registrar  shall  receive  from  the 
Federal  Farm  Loan  Board  notice 
that  it  has  approved  any  issue  of 
farm  loan  bonds  under  the  provi- 
sions of  section 

twenty-one 

he  shall  forthwith  take  such  steps 
as  may  be  necessary,  in  accordance 
with  the  provisions  of  this  Act,  to 
insure  the  prompt  execution  of  said 
bonds  and 

the  delivery  of 

the  same  to  the  land  bank  applying 
therefor. 

Whenever  the  Federal  Farm  Loan 
Board  shall  reject  entirely  any  ap- 
plication for  an  issue  of  farm  loan 
bonds,  the  first  mortgages  and 


bonds  tendered  to  the  farm  loan 
registrar  as  collateral  security  there- 
for shall  be  forthwith  returned  to 
said  land  bank  by  him. 

Whenever  the  Federal  Farm 
Loan  Board  shall  approve  an  issue 
of  farm  loan  bonds,  the  farm  loan 
registrar  having  the  custody  of  the 
first  mortgages  and  bonds  tendered 
as  collateral  security  for  such  issue 
of  bonds  shall  retain  in  his  custody 
those  first  mortgages  and  bonds 
winch  are  to  be  held  as  collateral 
security,  and  shall  return  to  the 
bank  owning  the  same  any  of  said 
mortgages  and  bonds  which  are  not 
to  be  held  by  him  as  collateral  se- 
curity. The  land  bank  which  is  to 
issue  said  farm  loan  bonds  shall 
transfer  to  said  registrar,  by  assign- 
ment, in  trust,  all  first  mortgages 
and  bonds  which  are  to  be  held  by 
said  registrar  as  collateral  security, 
said  assignment  providing  for  the 
right  of  redemption  at  any  time  by 
payment  as  provided  in  tins  Act 

and  reserving 


AS  PASSED  BY  HOUSE. 

No  issue  of  farm  loan  bonds  shall 
be  authorized  unless  the  Federal 
Farm  Loan  Board  shall  approve 
such  issue  in  writing. 

ISSUE  OF  FARM  LOAN  BONDS. 

Sec.  18. 

That  whenever  any  farm  loan 
registrar  shall  receive  from  the 
Federal  Farm  Loan  Board  notice 
that  it  has  approved  any  issue  of 
farm  loan  bonds  under  the  provi- 
sions of  section 

seventeen 

he  shall  forthwith  take  such  steps 
as  may  be  necessary,  in  accordance 
with  the  provisions  of  this  Act,  to 
insure  the  prompt  execution  of  said 
bonds  and 

shall  deliver 

the  same  to  the  land  bank  applying 
therefor. 

Whenever  the  Federal  Farm  Loan 
Board  shall  reject  entirely  any  ap- 
plication for  an  issue  of  farm  loan 
bonds,  the  first  mortgages  and 

United  States 

bonds  tendered  to  the  farm  loan 
registrar  as  collateral  security  there- 
for shall  be  forthwith  returned  to 
said  land  bank  by  him. 

Whenever  the  Federal  Farm 
Loan  Board  shall  approve  an  issue 
of  farm  loan  bonds,  the  farm  loan 
registrar  having  the  custody  of  the 
first  mortgages  and  bonds  tendered 
as  collateral  security  for  such  issue 
of  bonds  shall  retain  in  his  custody 
those  first  mortgages  and  bonds 
which  are  to  be  held  as  collateral 
security,  and  shall  return  to  the 
bank  owning  the  same  any  of  said 
mortgages  and  bonds  which  are  not 
to  be  held  by  him  as  collateral  se- 
curity. The  land  bank  which  is  to 
issue  said  farm  loan  bonds  shall 
transfer  to  said  registrar,  by  assign- 
ment, in  trust,  all  first  mortgages 
and  bonds  which  are  to  be  held  by 
said  registrar  as  collateral  security, 
said  assignment  providing  for  the 
right  of  redemption  at  any  time  by 
payment  as  provided  in  this  Act. 


The  land  bank  shall  have 


■ 

* 


. 


■ 


■ 


■ 


' 

■ 


. 


■ 

. 


* 

■ 


■ 


* 


. 

N‘ 


. 


RURAL  CREDITS  BILL. 


57 


AS  PASSED  BY  HOUSE, 
the  right 

of  substitution  of 

other  mortgages  qualified  under 
section  twelve 


or  section 
seventeen 

of  this  Act.  Said  mortgages  and 
bonds  shall  be  deposited  in  such 
deposit  vault  or  bank  as  the  Federal 
Farm  Loan  Board  shall  approve, 
subject  to  the  control  of  said  regis- 
trar and  in  his  name  as  trustee  for 
the  bank  issuing  the.  farm  loan 
bonds  and  for  the  prospective  hold- 
ers of  said  farm  loan  bonds. 

No  mortgage  shall  be  accepted  by 
a farm  loan  registrar  from  a Federal 
land  bank  as  part  of  an  offering  to 
secure  an  issue  of  farm  loan  bonds, 
either  originally  or  by  substitution, 
except  first  mortgages  made  sub- 
ject to  the  conditions  prescribed  in 
said  sections  twelve  or  seventeen. 

It  shall  be  the  duty  of  each  farm 
loan  registrar  to  see  that  the  farm 
loan  bonds  delivered  by  him  and 
outstanding  do  not  exceed  the 
amount  of  collateral  security 
pledged  therefor.  Such  registrar 
may,  in  his  discretion,  temporarily 
accept 

in  place  of  mortgages  withdrawn. 
United  States  Government  bonds 
, farm  loan  bonds, 
or  cash. 


The  Federal  Farm  Loan  Board 
may,  at  any  time,  call  upon  any  land 
bank  for  additional  security  to  pro- 
tect the  bonds  issued  by  it. 

FORM  OF  FARM  LOAN  BONDS. 

Sec.  23. 

That 

all 

bonds  provided  for  in  this  Act  shall 
42564— S.  Doc.  444,  64-1 8 


AS  PASSED  BY  HOUSE, 
the  right 
to  substitute 

other  mortgages  qualified  under 
section  twolve 

, section  fifteen, 

or  section 

sixteen 

of  this  Act.  Said  mortgages  and 
bonds  shall  be  deposited  in  such 
deposit  vault  or  bank  as  the  Federal 
Farm  Loan  Board  shall  approve, 
subject  to  the  control  of  said  regis- 
trar and  in  his  name  as  trustee  for 
the  bank  issuing  the  farm  loan 
bonds  and  for  the  prospective  hold- 
ers of  said  farm  loan  bonds. 


It  shall  be  the  duty  of  each  farm 
loan  registrar  to  see  that  the  farm 
loan  bonds  delivered  by  him  and 
outstanding  do  not  exceed  the 
amount  of  collateral  security 
pledged  therefor.  Such  registrar 
may,  in  his  discretion,  temporarily 
accept 


United  States  Government  bonds 


or  cash 

in  place  of  mortgages  withdrawn. 

The  Federal  Farm  Loan  Board 
may,  at  any  time,  call  upon  any  land 
bank  for  additional  security  to  pro- 
tect the  bonds  issued  by  it. 

FORM  OF  FARM  LOAN  BONDS. 

Sec.  19. 

That 


bonds  provided  for  in  this  Act  shall 


* 


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. 

■ 

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RURAL  CREDITS  BILL. 


58 


AS  PASSED  IiY  SENATE. 

bo  issued  under  the  authority  and 
by  the  direction  of  the  Federal 
Farm  Loan  Board.  They  shall 

AS  PASSED  BY  HOUSE. 

be  issued  in  denominations  of 

be  issued  in  denominations  of 

$25, 

$20, 

$50,  $100,  $500, 
and 

$50,  $100,  $500, 

$1,000;  they  shall  run  for  specified 
minimum  and  maximum  periods, 
subject  to 

$1,000;  they  shall  run  for  specified 
minimum  and  maximum  periods, 
subject  to 

be  paid 

payment 

and 

and 

retired 

retirement, 

at  the  option  of  the  land  bank  at 
any  time  after 

at  the  option  of  the  land  bank,  at 
any  time  after 

ten 

five 

years  from  the  date  of  their  issue. 
They  shall  have  interest  coupons 
attached,  payable  semiannually, 
and  shall  be  issued  in  series  of  not 
less  than  $50,000, 

years  from  the  date  of  their  issue. 
They  shall  have  interest  coupons 
attached,  payable  semiannually, 
and  shall  be  issued  in  series  of  not 
less  than  $50,000, 

whose 

the 

amount  and 

amount  and 

term  shall 

terms  to 

be  fixed  by  the  Federal  Farm  Loan 
Board.  They  shall  bear  a rate  of 
interest  not  to  exceed  live  per 
centum  per  annum. 

The  Federal  Farm  Loan  Board 
shall  prescribe  rules  and  regulations 
concerning  the 

form  of  farm  loan  bonds,  and  the 

be  fixed  by  the  Federal  Farm  Loan 
Board.  They  shall  bear  a rate  of 
interest  not  to  exceed  five  per 
centum  per  annum. 

The  Federal  Farm  Loan  Board 
shall  prescribe  rules  and  regulations 
concerning  the 

circumstances  and  manner  in  which 
farm  loan  bonds  shall  be  paid  and 
retired  under  the  provisions  of  this 
Act. 

Farm  loan  bonds  shall  be  de- 
livered through  the  registrar  of  the 
district  to  the  bank  applying  for  the 
same. 

circumstances  and  manner  in  which 
farm  loan  bonds  shad  be  paid  and 
retired  under  the  provisions  of  this 
Act. 

• 

In  order  to  furnish  farm  loan 
bonds  for  delivery  at  the  Federal 
land  banks  and  joint-stock  land 
banks,  the  Secretary  of  the  Treas- 
ury is  hereby  authorized  to  prepare 
suitable  bonds  in  such  form,  subject 
to  the  provisions  of  this  Act,  as  the 

. 


t • ■ , 


. 


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- 

- 


. 

- 


RURAL  CREDITS  BILL. 


59 


AS  PASSED  BY  SENATE. 


In  order  to  furnish  suitably  en- 
graved bonds  for  delivery  to  Federal 
land  banks  and  joint-stock  land 
banks,  the  Comptroller  of  the  Cur- 
rency shall,  under  the  direction  of 
the  Secretary  of  the  Treasury,  cause 
plates  and  dies  to  be  engraved  in 
the  best  manner  to  guard  against 
counterfeits  and  fraudulent  altera- 
tions, and  shall  have  printed  there- 
from and  numbered  such  quantities 
of  such  bonds  of  the  denominations 
of  $25,  $50,  $100,  $500  and  $1,000 
as  may  be  required  to  supply  such 
land  banks.  Such  bonds  shall  be 
in  form  and  tenor  as  directed  by  the 
Federal  Farm  Loan  Board  under 
the  provisions  of  this  Act  and  shall 
bear  the  distinctive  numbers  and 
names  of  the  several  land  banks  by 
which  they  are  issued.  They  may 
be  exchanged  into  registered  bonds 
of  any  amount,  and  reexchanged 
into  coupon  bonds,  at  the  option  of 
the  holder,  under  rules  and  regula- 
tions to  be  prescribed  by  the  Fed- 
eral Farm  Loan  Board. 

When  such  bonds  have  been  pre- 
pared they  shall  be  deposited  in  the 
Treasury  or  in  the  sub  treasury  or 
mint  of  the  United  States  nearest 
the  place  of  business  of  each  land 
bank,  and  shall  be  held  for  the  use 
of  such  bank,  subject  to  the  order 
of  the  farm  loan  registrar  of  the 
district. 

The  plates  and  dies  to  be  pro- 
cured by  the  Comptroller  of  the 
Currency  for  the  printing  of  such 
bonds  shall  remain  under  his  con- 
trol and  direction,  and  the  expenses 
necessarily  incurred  in  executing 
the  laws  relating  to  the  preparation 
of  such  bonds  and  all  other  expenses 


AS  PASSED  BY  HOUSE. 

Federal  Farm  Loan  Board  may  ap- 
prove, such  bonds  when  prepared  to 
be  held  in  the  Treasury  subject  to 
delivery  upon  order  of  the  Federal 
Farm  Loan  Board.  The  engraved 
plates,  dies,  bed-pieces,  and  so  forth, 
executed  in  connection  therewith 
shall  remain  in  the  custody  of  the 
Secretary  of  the  Treasury.  Any  ex- 
penses incurred  in  the  preparation, 
custody,  and  delivery  of  such  farm 
loan  bonds  shall  be  paid  by  the  Sec- 
retary of  the  Terasury  from  any 
funds  in  the  Treasury  not  otherwise 
appropriated : Provided,  however, 

That  the  Secretary  shall  be  reim- 
bursed for  such  expenditures  by  the 
Federal  Farm  Loan  Board  through 
assessment  upon  the  farm-land 
banks  in  proportion  to  the  work 
executed. 


- 


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. ' 

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RURAL  CREDITS  BILL.  60 


AS  PASSED  BY  SENATE. 

AS  PASSED  BY  HOUSE. 

incidental  to  their  issue  and  retire- 
ment shall  he  paid  by  the  land 
banks.  The  Federal  Farm  Loan 
Board  shall  levy  semiannually 
against  the  respective  Federal  land 
banks  and  joint  stock  land  hanks, 
in  proportion  to  the  issue  of  bonds 
by  each,  a sufficient  amount  to 
cover  such  expenses. 

The  examination  of  plates,  dies, 
bed  pieces,  and  so  forth,  and  regu- 
lations relating  to  such  examination 
of  plates,  dies,  and  so  forth,  of 
national  bank  notes  provided  tor  in 
section  fifty-one  hundred  and  sev- 
enty-four, Revised  Statutes,  are 
hereby  extended  to  include  bonds 
herein  provided  for. 

Any  appropriation  heretofore 
made  out  of  the  general  fund  of  the 
Treasury  for  engraving  plates  anti 
cties,  for  the  purchase  of  distinctive 
paper,  or  to  cover  any  other  expense 
in  connection  with  the  printing  of 
paper  currency,  and  any  distinctive 
paper  that  may  be  on  hand  at  the 
time  of  the  passage  of  this  Act  may 
be  used  in  the  discretion  of  the  Sec- 
retary of  the  Treasury  for  the  pur- 
poses of  this  Act,  and  should  the 
appropriations  heretofore  made  be 
insufficient  to  meet  the  requirements 
of  this  Act,  the  Secretary  is  hereby 
authorized  to  use  so  much  of  any 
funds  in  the  Treasury  not  otherwise 
appropriated  as  may  be  required 
for  the  purpose  of  furnishing  the 
bonds  aforesaid,  adequate  reim- 
bursement being  duly  made  therefor 
under  the  provisions  of  this  section. 

• 

SPECIAL  PROVISIONS  OF  FARM 
LOAN  BONDS. 

SPECIAL  PROVISIONS  OF  FARM 
LOAN  BONDS. 

Sec.  24.  That 

Sec.  20.  That  the  form  of  farm 
loan  bonds  issued  under  this  Act 
shall  be  prepared  by  the  Federal 
Farm  Loan  Board.  The  form  of 
farm  loan  bonds  issued  by  a Federal 
land  bank  shall  include,  among 
other  provisions,  a copy  of  this  sec- 
tion of  this  Act,  and  a statement 
that  the  assets  of  all  the  Federal 
land  banks  are  jointly  and  severally 
liable  for  the  payment  of  each  bond, 
and  shall  further  state  the  physical 
basis  of  such  bonds  in  farm  lands, 
and  such  other  information  as  may 
be  prescribed  by  the  Federal  Farm 
Loan  Board. 

Each  bond  shall  also  contain  a 
certificate  in  the  face  thereof,  signed 
by  the  Farm  Loan  Commissioner,  to 
the  effect  that  this  bond  has  the  ap- 
proval in  form  and  issue  of  the  Fed- 
eral Farm  Loan  Board’and  is  legal 

. 


1. 


:|||| 


. 


■ 


■ (p> 


■ 


■ 


. 

* 


RURAL  CREDITS  BILL 


AS  PASSED  BY  SENATE. 


each 

Federal 

land  bank  shall  be 


bound  in  all  respects  by  the  acts  of 
its 

officers 
in  signing 
and  issuing 

farm  loan  bonds,  and  by  the  acts  of 
the  Federal  Farm  Loan  Board  in 
authorizing  their  issue. 


Every  Federal  land  bank  issuing 
farm  loan  bonds  shall  be  primarily 
liable  therefor,  and  shall  also  be 
liable,  upon  presentation  of  farm 
loan  bond  coupons,  for  interest  pay- 
ments due  upon  any  farm  loan 
bonds  issued  by  other  Federal  land 
banks  and  remaining  unpaid  in  con- 
sequence of  the  default  of  such  other 
land  banks;  and  every  such  bank 
shall  likewise  be  liable  for  such  por- 
tion of  the  principal  of  farm  loan 
bonds  so  issued  as  shall  not  be  paid 
after  the  assets  of  any  such  other 
land  banks  shall  have  been  liqui- 
dated and  distributed:  Provided, 
That  such  losses,  if  any,  cither  of 
interest  or  of  principal,  shall  be  as- 
sessed by  the  Federal  Farm  Loan 
Board  against  solvent  land  banks 
liable  therefor  in  proportion  to  the 
amount  of  farm  loan  bonds  which 
each  may  have  outstanding  at  the 
time  of  such  assessment. 

Every  Federal  land  bank  shall  by 
appropriate  action  of  its  board  of 
directors,  duly  recorded  in  its  min- 
utes, obligate  itself  to  become  liable 
on  farm  loan  bonds  as  provided  in 
this  section. 


AS  PASSED  BY  HOUSE. 

and  regular  in  all  respects.  It  shall 
be  signed  by  the  president  of  the 
bank  issuing  the  same  and  attested 
by  its  secretary. 

Each 


land  bank  shall  be 
held  to  be 

bound  in  all  respects  by  the  acts  of 
its 

president 
in  signing 


farm  loan  bonds,  and  by  the  acts 
of  the  Federal  Farm  Loan  Board  in 
authorizing  their  issue. 

There  shall  appear  in  the  face  of 
each  farm  loan  bond  provided  for  in 
this  Act  the  statement  that  such 
bond  is  not  taxable  by  National, 
State,  or  municipal  authority. 

Every  Federal  land  bank  issuing 
farm  loan  bonds  shall  be  primarily 
liable  therefor,  and  shall  also  be 
liable,  upon  presentation  of  farm 
loan  bond  coupons,  for  interest  pay- 
ments due  upon  any  farm  loan 
bonds  issued  by  other  Federal  land 
banks  and  remaining  unpaid  in  con- 
sequence of  the  default  of  such  other 
land  banks;  and  every  such  bank 
shall  likewise  be  liable  for  such  por- 
tion of  the  principal  of  farm  loan 
bonds  so  issued  as  shall  not  be  paid 
after  the  assets  of  any  such  other 
land  banks  shall  have  been  liqui- 
dated and  distributed:  Provided, 
That  such  losses,  if  any,  either  of 
interest  or  of  principal,  shall  be  as- 
sessed by  the  Federal  Farm  Loan 
Board  against  solvent  land  banks 
liable  therefor  in  proportion  to  the 
amount  of  farm  loan  bonds  which 
each  may  have  outstanding  at  the 
time  of  such  assessment. 

Every  Federal  land  bank  shall  by 
appropriate  action  of  its  board  of 
directors,  didy  recorded  in  its  min- 
utes, obligate  itself  to  become  liable 
on  farm  loan  bonds  as  provided  in 
this  section. 


. 


. 


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. 

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RURAL  CREDITS  BILL. 


62 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 

Every  farm  loan  bond  issued  by  a 
Federal  land  bank  shall  bo  signed  by 
its  president  and  attested  by  its 
secretary,  and  shall  contain  in  the 
face  thereof  a certificate  signed  by 
the  farm  loan  commissioner  to  the 
effect  that  it  is  issued  under  the 
authority  of  the  Federal  farm  loan 
Act,  has  the  approval  in  form  and 
issue  of  the  Federal  Farm  Loan 
Board,  and  is  legal  and  regular  in  all 
respects;  that  it  is  not  taxable  by 
National,  State,  municipal,  or  local 
authority;  that  it  is  issued  against 
collateral  security  of  Government 
bonds,  or  first  mortgages  on  farm 
lands,  indorsed  by  farm  loan  associ- 
ations having  double  or  unlimited 
liability  of  their  members,  as  the 
case  may  be,  and  at  least  equal  in 
amount  to  the  bonds  issued;  and 
that  all  Federal  land  banks,  stating 
the  approximate  amount  of  their 
aggregate  capital  and  surplus,  are 
liable  for  the  payment  of  each  bond. 

APPLICATION  OF  AMORTIZATION  AND  APPLICATION  OF  AMORTIZATION  AND 
INTEREST  PAYMENTS.  INTEREST  PAYMENTS. 


Sec.  25. 

That  whenever  any  Federal  land 
bank,  or  joint  stock  land  bank,  shall 
receive  any  interest,  amortization  or 
other  payments  upon  any  first 
mortgage 

or  bond 

pledged  as  collateral  security  for  the 
issue  of  farm  loan  bonds,  it  shall 
forthwith  notify  the  farm  loan  regis- 
trar of  the  items  so  received.  Said 
registrar  shall  forthwith  cause  such 
payment  to  be  duly  credited  upon 

any 

mortgage  entitled  to  such  credit. 
Whenever  any  such  mortgage  is 
paid  in  full,  said  registrar  shall  cause 
the  same  to  be  canceled  and  deliv- 
ered to  the  proper  land  bank 

for  transmission 


to  the  original  maker  thereof,  or  his 
heirs,  administrators 


or  assigns. 


Sec.  21. 

That  whenever  any  Federal  land 
bank,  or  joint  stock  land  bank,  shall 
receive  any  interest,  amortization  or 
other  payments  upon  any  first 
mortgage 


pledged  as  collateral  security  for  the 
issue  of  farm  loan  bonds,  it  shall 
forthwith  notify  the  farm  loan  regis- 
trar of  the  items  so  received.  Said 
registrar  shall  forthwith  cause  such 
payment  to  be  duly  credited  upon 

the 

mortgage  entitled  to  such  credit. 
Whenever  any  such  mortgage  is 
paid  in  full,  said  registrar  shall  cause 
the  same  to  be  canceled  and  deliv-. 
ered  to  the  proper  land  bank 

, which  shall  promptly  satisfy  and 
discharge  the  lien  of  record  and 
transmit  such  canceled  mortgage 

to  the  original  maker  thereof,  or  his 
heirs,  administrators 

, executors, 

or  assigns. 


. 


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■ 

. 

■ 

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■ 

' 


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. 


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RURAL  CREDITS  BILL. 


63 


AS  PASSED  BY  SENATE. 

Upon  written  application  by  any 
Federal  land  bank,  or  joint  stock 
land  bank,  to  the  farm  loan  regis- 
trar, it  may  be  permitted,  in  the  dis- 
cretion of  said  registrar,  to  withdraw 
any  mortgages  or  bonds  pledged  as 
collateral  security  under  this  Act, 
and  to  substitute  therefor  other 
mortgages  or  United  States  Govern- 
ment bonds  not  less  in  amount  than 
the  mortgages  or  bonds  desired  to 
be  withdrawn,  such  substituted 
mortgages  being  qualified  under  sec- 
tion twelve  or  section  seventeen  of 
this  Act. 

Whenever  any  farm  loan  bonds,  or 
coupons  or  interest  payments  of  such 
bonds,  are  due  under  their  terms,  they 
shall  be  payable  at  the  land  bank  by 
which  they  were  issued,  in  gold  or 
lawful  money,  and  upon  payment 
shall  be  duly  canceled  by  said  bank. 
At  the  discretion  of  the  Federal 
Farm  Loan  Board,  payment  of  any 
farm  loan  bond  or  coupon  or  interest 
payment  may,  however,  be  author- 
ized to  be  made  at  any  Federal  land 
bank,  any  joint  stock  land  bank,  or 
any  other  bank,  under  rules  and 
regulations  to  be  prescribed  by  the 
Federal  Farm  Loan  Board. 

When  any  land  bank  shall  sur- 
render to  the  proper  farm  loan  reg- 
istrar any  farm  loan  bonds  of  any 
series,  canceled  or  uncanceled,  said 
land  bank  shall  be  entitled  to  with- 
draw first  mortgages  and  bonds 
pledged  as  collateral  security  for 
any  of  said  series  of  farm  loan  bonds 
to  an  amount  equal  to  the  farm  loan 
bonds  so  surrendered,  and  it  shall 
be  the  duty  of  said  registrar  to  per- 
mit and  direct  the  delivery  of  such 
mortgages  and  bonds  to  such  land 
bank. 

Interest  payments  on  hypothe- 
cated first  mortgages  shall  be  at  the 
disposal  of  the  land  bank  pledging 
the  same,  and  shall  be  available  for 
the  payment  of  coupons  and  the 
interest  of  farm  loan  bonds  as  they 
become  due. 

Whenever  any  bond  matures,  or 
the  interest  on  any  registered  bond 
is  due,  or  the  coupon  on  any  coupon 
bond  matures,  and  the  same  shall 
be  presented  for  payment  as  pro- 
vided in  this  act,  the  full  face  value 
thereof  shall  be  paid  to  the  holder. 


AS  PASSED  BY  HOUSE. 


Whenever  any  farm  loan  bonds,  or 
coupons  or  interest  payments  of  such 
bonds, are  due  under  their  terms, they 
shall  be  payable  at  the  land  bank  by 
which  they  were  issued,  in  gold  or 
lawful  money,  and  upon  payment 
shall  be  duly  canceled  by  said  bank. 
At  the  discretion  of  the  Federal 
Farm  Loan  Board,  payment  of  any 
farm  loan  bond  or  coupon  or  interest 
payment  may,  however,  be  author- 
ized to  be  made  at  any  Federal  land 
bank,  any  joint  stock  land  bank,  or 
any  other  bank,  under  rules  and 
regulations  to  be  prescribed  by  the 
Federal  Farm  Loan  Board. 

When  any  land  bank  shall  sur- 
render to  the  proper  farm  loan  reg- 
istrar any  farm  loan  bonds  of  any 
series,  canceled  or  uncanceled,  said 
land  bank  shall  be  entitled  to  with- 
draw first  mortgages  and  bonds 
pledged  as  collateral  security  for 
any  of  said  series  of  farm  loan  bonds 
to  an  amount  equal  to  the  farm  loan 
bonds  so  surrendered,  and  it  shall 
be  the  duty  of  said  registrar  to  per- 
mit and  direct  the  delivery  of  such 
mortgages  and  bonds  to  such  land 
bank. 

Interest  payments  on  hypothe- 
cated first  mortgages  shall  be  at  the 
disposal  of  the  land  bank  pledging 
the  same,  and  shall  be  available  for 
the  payment  of  coupons  and  the 
interest  of  farm  loan  bonds  as  they 
become  due. 

Whenever  any  bond  matures,  or 
the  interest  on  any  registered  bond 
is  due,  or  the  coupon  on  any  coupon 
bond  matures,  and  the  same  shall 
be  presented  for  payment  as  pro- 
vided in  this  act,  the  full  face  value 
thereof  shall  be  paid  to  the  holder. 


Amortization 


Amortization 


or 


and 


other  payments  on  the  principal  of  other  payments  on  the  principal  of 
first  mortgages  held  first  mortgages  held 


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RURAL  CREDITS  BILL, 


04 


AS  PASSED  BY  SENATE. 


as  collateral  security  for  the  issue 
of  farm  loan  bonds  shall 

constitute  a trust  fund  in  the  hands 
of 

the  Federal  land  bank  or  joint  stock 
land  bank  receiving  the  same, 

and  shall  be  applied  or  employed 

as  follows: 

In  the  case  of  a Federal  land 
bank — 

(a)  To  pay  off  farm  loan  bonds 
issued  by  said  bank  as  they  mature. 

(b)  To  purchase 


farm  loan  bonds  issued  by  said 
bank  or  by  any 

other 

Federal  land  bank. 

(c)  To  loan  on  first  mortgages  on 
farm  lands  within  the  land  bank 
district,  qualified  under  this  Act  as 
collateral  security  for  an  issue  of 
farm  loan  bonds. 

(d)  To  purchase  United  States 
Government  bonds. 

(e)  To  convert  said  payments 
into  gold  or  lawful  money. 

In  the  case  of  a joint  stock  land 
bank — 

(a)  To  pay  off  farm  loan  bonds 
issued  by  said  bank  as  they  mature. 

(b)  To  purchase 


farm  loan  bonds. 

(c)  To  loan  on  first  mortgages  on 
farm  lands  within  the  State  in 
which  it  has  its  principal  office. 

(d)  To  purchase  United  States 
Government  bonds. 

(e)  To  convert  said  payments 
into  gold  or  lawful  money. 

The  farm  loan  bonds,  first  mort- 
gages, Government  bonds,  or  gold 
or  lawful  money, 

constituting  the  trust  fund  afore- 
said, 


AS  PASSED  BY  HOUSE. 

by  a farm  loan  registrar 

as  collateral  security  for  the  issue 
of  farm  loan  bonds  shall 

be  applied  by 

the  Federal  land  bank  or  joint  stock 
land  bank  receiving  the  same 


as  follows: 

In  the  case  of  a Federal  land 
bank — 

(a)  To  pay  off  farm  loan  bonds 
issued  by  said  bank  as  they  mature. 

(b)  To  purchase 

at  or  below  par 

farm  loan  bonds  issued  by  said 
bank  or  by  any 


Federal  land  bank. 

(c)  To  loan  on  first  mortgages  on 
farm  lands  within  the  land  bank 
district,  qualified  under  this  Act  as 
collateral  security  for  an  issue  of 
farm  loan  bonds. 

(d)  To  purchase  United  States 
Government  bonds. 


In  the  case  of  a joint  Stockland 
bank — - 

(a)  To  pay  off  farm  loan  bonds 
issued  by  said  bank  as  they  mature. 

(b)  To  purchase 
at  or  below  par 
farm  loan  bonds. 

(c)  To  loan  on  first  mortgages  on 
farm  lands  within  the  State  in 
which  it  has  its  principal  office. 

(d)  To  purchase  United  States 
Government  bonds. 


The  farm  loan  bonds,  first  mort- 
gages, Government  bonds,  or  gold 
or  lawful  money, 


. 


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RURAL  CREDITS  BILL. 


65 


AS  PASSED  BY  SENATE. 

AS  PASSED  BY  HOUSE. 

shall  ho  forthwith  deposited  with 
the  farm  loan  registrar  as  substi- 
tuted collateral  security  in  place  of 
the  sums  paid  on  the  principal  of 
indorsed  mortgages  hold  by  him  in 
trust. 

Federal  land  banks,  in  the  order 
of  their  applications,  shall  have  a 
preference  over  other  subscribers 
in  purchasing  the  whole  or  any  part 
of  an  issue  of  farm  loan  bonds. 

Every  Federal  land  bank,  or 
joint  stock  land  bank,  shall  notify 
the  farm  loan  registrar  of  the  dis- 
position of  all  payments  made  on 
the  principal  of  mortgages  held  as 
collateral  security  for  an  issue  of 
farm  loan  bonds,  and  said  registrar  is 
authorized,  at  his  discretion,  to 
order  any  of  such  payments,  or  the 
proceeds  thereof,  wherever  depos- 
ited or  however  invested,  to  be 
immediately  transferred  to  his  ac- 
count as  trustee  aforesaid. 

shall  be  forthwith  deposited  with 
the  farm  loan  registrar  as  substi- 
tuted collateral  security  in  place  of 
the  sums  paid  on  the  principal  of 
indorsed  mortgages  held  by  him  in 
trust. 

RESERVE 

RESERVES 

AND  DIVIDENDS  OF  LAND  BANKS. 

AND  DIVIDENDS  OF  LAND  BANKS. 

Sec.  26. 

Sec.  22. 

That  every  Federal  land  bank,  and 
every  joint  stock  land  bank,  shall 

out  of  its  net  earnings, 

That  every  Federal  land  bank,  and 
every  joint  stock  land  bank,  shall 

semiannually  carry  to  reserve  ac- 
count twenty-five  per  centum 

semiannually  carry  to  reserve  ac- 
count twenty-five  per  centum 

thereof 

of  its  net  earnings  a 

until  said  reserve  account  shall  show 

until  said  reserve  account  shall  show 

a credit 

an  aggregate  « 

balance  equal  to  twenty  per  centum 
of  the  outstanding  capital  stock  of 
said  land  bank.  Whenever  said 
reserve  shall  have  been  impaired, 
said  balance  of  twenty  per  centum 
shall  be  fully  restored  before  any 
dividends  are  paid.  After  said  re- 
serve has  reached  the  sum  of  twenty 
per  centum  of  the  outstanding  capi- 
tal stock,  five  per  centum  of  the  net 
earnings  shall  be  annually  added 
thereto.  For  the  period  of  two 
years  from  the  date  when  any  de- 
fault occurs  in  the  payment  of  the 
interest,  amortization  installments, 
or  principal  on  any  first  mortgage, 
by  both  mortgagor  and  indorser,  the 
amount  so  defaulted  shall  be  carried 
to  a suspense  account,  and  at  the 
end  of  the  two-year  period  specified, 
42564— S.  Doc.  444,  64-1 9 

balance  equal  to  twenty  per  centum 
of  the  outstanding  capital  stock  of 
said  land  bank.  Whenever  said 
reserve  shall  have  been  impaired, 
said  balance  of  twenty  per  centum 
shall  be  fully  restored  before  any 
dividends  are  paid.  After  said  re- 
serve has  reached  the  sum  of  twenty 
per  centum  of  the  outstanding  capi- 
tal stock,  five,  per  centum  of  the  net 
earnings  shall  be  annually  added 
thereto.  For  the  period  of  two 
years  from  the  date  when  any  de- 
fault occurs  in  the  payment  of  the 
interest,  amortization  installments, 
or  principal  on  any  first  mortgage, 
by  both  mortgagor  and  indorser,  the 
amount  so  defaulted  shall  be  cairied 
to  a suspense,  account,  and  at  the 
end  of  the  two-year  period  specified, 

. 

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RURAL  CREDITS  BILL. 


AS  PASSED  BY  SENATE. 

unless  collected , shall  lie  debited  to 
reserve  account. 


Whenever  the  net  earnings  of  any 
Federal  land  bank,  or  joint  stock 
land  bank, 

after  deducting  the  twenty-five  per 
centum  or  the  five  per  centum 
hereinbefore  directed  to  be  deducted 
for  credit  to  reserve  account, 

shall  amount  to  two  per  centum 
upon  the  face  value  of  the  capital 
stock  of  such  land  bank  then  out- 
standing, said  land  bank  may,  at  its 
discretion, 


AS  PASSED  BY  HOUSE. 

unless  collected,  shall  be  debited  to 
reserve  account. 

Every  Federal  land  bank  shall 
maintain  a special  reserve  fund. 
Such  fund  shall  be  created  by  de- 
ducting from  the  subscription  which 
is  made  to  the  capital  of  the  land 
bank  on  account  of  every  amortized 
mortgage  loan,  a sum  equal  to  five 
per  centum  of  the  annual  interest 
income  on  the  face  of  such  loan 
until  the  said  special  reserve  fund 
shall  amount  to  the  maximum  sum 
of  $150,000. 

Each  Federal  land  bank  shall 
supply,  as  far  as  practicable  from 
this  special  reserve  fund  all  pay- 
ments of  interest  and  amortization 
installments  on  all  mortgage  loans 
where  defaults  are  carried  to  sus- 
pense account  as  provided  in  this 
section. 

No  national  farm  loan  association 
shall  be  declared  insolvent  by  the 
Federal  Farm  Loan  Board  during 
the  period  in  which  all  the  install- 
ments of  interest  and  amortization 
on  its  indorsed  mortgage  loans  are 
fully  paid  from  this  special  reserve 
fund : Provided,  That  payments  from 
such  special  reserve  fund  shall  not 
be  made  on  any  one  loan  for  a 
longer  period  than  two  years.  The 
special  reserve  fund  provided  in 
this  section  shall  be  used  for  no 
purpose  other  than  to  make  such 
payments  as  are  herein  specifically 
authorized  and  when  recovery  is 
made  by  any  land  bank  of  any 
moneys  paid  from  its  special  reserve 
fund,  the  total  amount  of  said 
moneys  so  recovered  shall  be  paid 
into  the  special  reserve  fund.  If 
the  full  amount  is  not  recovered 
and  it  is  debited  to  reserve  as  pro- 
vided in  this  section,  full  reim- 
bursement to  the  special  reserve 
fund  shall  be  made  from  the  fund 
so  debited. 


After  deducting  the  twenty-five 
per  centum  or  the  five  per  centum 
hereinbefore  directed  to  be  de- 
ducted for  credit  to  reserve  account, 

any  land  bank  shall 


■ 


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RURAL  CREDITS  BILL. 


67 


AS  PASSED  BY  SENATE. 

declare  a dividend  to  shareholders  of 
the  whole  or  any  part  of  the  balance 
of  said  net  earnings. 

RESERVE  AND  DIVIDENDS  OF  NA- 
TIONAL FARM  LOAN  ASSOCIATIONS. 

Sec.  27.  That  every  national 
farm  loan  association  shall,  out  of 
its  net  earnings,  semiannually  carry 
to  reserve  account  a sum  not  less 
than  twenty-five  per  centum  of  such 
net  earnings  until  said  reserve  ac- 
count shall  show  a credit  balance 
equal  to  twenty  per  centum  of  the 
outstanding  capital  stock  of  said 
association. 

Whenever  said  reserve  shall  have 
been  impaired,  said  credit  balance 
of  twenty  per  centum  shall  be  fully 
restored  before  any  dividends  are 
paid . Af  ter  said  reserve  has  reached 
said  sum  of  twenty  per  centum,  five 
er  centum  of  the  net  earnings  shall 
e annually  added  thereto. 

Whenever  the  net  earnings  of  any 
farm  loan  association,  after  de- 
ducting the  twenty-five  per  centum 
or  the  five  per  centum  hereinbefore 
directed  to  be  credited  to  reserve 
account,  shall  amount  to  two  per 
centum  upon  the  face  value  of  the 
capital  stock  of  such  association 
then  outstanding,  said  association 
may,  at  its  discretion,  declare  a 
dividend  to  shareholders  of  the 
whole  or  any  part  of  the  balance  of 
said  net  earnings. 

The  reserve  of  each  farm  loan 
association  shall  be  invested  in  ac- 
cordance with  rules  and  regulations 
to  be  prescribed  by  the  Federal 
Farm  Loan  Board. 

Whenever  any  farm  loan  associa- 
tion shall  be  voluntarily  liquidated 
a sum  equal  to  its  reserve  account 
as  herein  required  shall  be  paid  to 
and  become  the  property  of  the 
Federal  land  bank  in  which  such 
loan  association  may  be  a share- 
holder. 


AS  PASSED  BY  HOUSE. 

declare  a dividend  to  shareholders 
of  the  whole  or  any  part  of  the 
balance  of  its  net  earnings. 


DEFAULTED  LOANS. 

Sec.  28.  That  if  there  shall  be 
default  under  the  terms  of  any  in- 
dorsed first  mortgage  held  by  a 
Federal  land  bank  under  the  pro- 
visions of  this  Act,  the  national  farm 
loan  association  or  agent  through 
which  said  mortgage  was  received 
by  said  Federal  land  bank  shall  be 
notified  of  said  default.  Said  asso- 
ciation or  agent  shall  thereupon  be 
required,  within  thirty  days  after 
such  notice,  to  make  good  said 


- 

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RURAL  CREDITS  BILL. 


68 


AS  PASSED  BY  SENATE. 

default,  either  by  payment  of  the 
amount  unpaid  thereon  in  cash,  or 
by  the  substitution  of  an  equal 
amount  of  farm  loan  bonds  issued 
by  said  land  bank,  with  all  unma- 
tured coupons  attached. 

EXEMPTION  FROM  TAXATION. 

Sec.  29. 

That  every  Federal  land  bank  and 
every  national  farm  loan  associa- 
tion, including  the  capital  stock  and 
reserve  or  surplus  therein  and  the 
income  derived  therefrom,  shall  be 
exempt  from  Federal,  State, 

municipal 

and  local  taxation,  except  taxes 
upon  real  estate  held,  purchased,  or 
taken  by  said  bank  or  association 
under  the  provisions  of  section 
eleven  and  section  thirteen  of  this 
Act.  First  mortgages  executed  to 
Federal  land  banks,  or  to  joint 
stock  land  banks, 

and  farm  loan  bonds  issued 

under  the  provisions  of  this  Act, 
shall  be  deemed  and  held  to  be  in- 
strumentalities of  the  Government 
of  the  United  States,  and  as  such 
they  and  the  income  derived  there- 
from shall  be  exempt  from  Federal, 
State, 

municipal 

and  local  taxation. 


AS  PASSED  BY  HOUSE. 


EXEMPTION  FROM  TAXATION. 

Sec.  23. 

That  every  Federal  land  bank  and 
every  national  farm  loan  associa- 
tion, including  the  capital  stock  and 
reserve  or  surplus  therein  and  the 
income  derived  therefrom,  shall  be 
exempt  from  Federal,  State, 


and  local  taxation,  except  taxes 
upon  real  estate  held,  purchased,  or 
taken  by  said  bank  or  association 
under  the  provisions  of  section 
eleven  and  section  thirteen  of  this 
Act.  First  mortgages  executed  to 
Federal  land  banks,  or  to  joint 
stock  land  banks, 


under  the  provisions  of  this  Act, 
shall  be  deemed  and  held  to  be  in- 
strumentalities of  the  Government 
of  the  United  States,  and  as  such 
they  and  the  income  derived  there- 
from shall  be  exempt  from  Federal, 
State, 


and  local  taxation. 

Farm  loan  bonds  issued  under 
the  provisions  of  this  Act  and  the 
income  derived  therefrom  shall  be 
exempt  from  Federal,  State,  and 
local  taxation. 

Nothing  herein  shall  prevent  all 
the  shares  in  any  joint  stock  bank 
from  being  included  in  the  valua- 
tion of  the  personal  property  of  the 
owner  or  holder  of  such  shares,  in 
assessing  taxes  imposed  by  author- 
ity of  the  State  within  which  the 
bank  is  located;  but  such  assess- 
ment and  taxation  shall  be  in  man- 
ner and  subject  to  the  conditions 
and  limitations  contained  in  section 
fifty-two  hundred  and  nineteen  of 
the  Revised  Statutes  with  reference 
to  the  shares  of  national  banking 
associations. 

Nothing  herein  shall  be  construed 
to  exempt  the  real  property  of  joint 
stock  banks  fromj^either  State, 


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AS  PASSED  BY  SENATE. 


INVESTMENT  IN  FARM  LOAN  BONDS. 

Sec.  30. 

That  farm  loan  bonds  issued  under 
the  provisions  of  this  Act  by  Fed- 
eral land  banks 


shall  be  a lawful  investment  for  all 
fiduciary  and  trust  funds,  and  may 
be  accepted  as  security  for  all  pub- 
lic deposits. 

Any 


bank  of  the  Federal  reserve  system 
may  buy  or  sell  farm 

loan 

bonds  issued 

by  Federal  land  banks 

under  the  authority  of  this  Act 

; any  member  bank  of  said  system 
may  accept  time  drafts  against  a 
deposit  of  such  bonds  as  security; 
acceptances  of  a member  bank  thus 
made,  or  the  direct  obligations  of 
such  bank  maturing  within  sixty 
days,  when  accompanied  by  such 
farm  loan  bonds  as  collateral  secur- 
ity not  less  in  face  value  than  the 
amount  of  such  direct  obligation, 
shall  be  eligible  for  discount  by  the 
Federal  reserve  bank  of  its  district. 


Section  nine  of  the  Act  of  June 
twenty-fifth,  nineteen  hundred  and 
ten,  entitled  “An  Act  to  establish 
postal  savings  depositaries  for  de- 
positing savings  at  interest,  with 
the  security  of  the  Government  for 
repayment  thereof,  and  for  other 


RURAL  CREDITS  BILL.  69 


AS  PASSED  BY  HOUSE. 

county,  or  municipal  taxes,  to  the 
same  extent,  according  to  its  value, 
as  other  real  property  is  taxed. 

INVESTMENT  IN  FARM  LOAN  BONDS. 

Sec.  24. 

That  farm  loan  bonds  issued  under 
the  provisions  of  this  Act  by  Fed- 
eral land  banks 

or  joint  stock  land  banks 

shall  be  a lawful  investment  for  all 
fiduciary  and  trust  funds,  and  may 
be  accepted  as  security  for  all  pub- 
lic deposits. 

Any 

member 

bank  of  the  Federal  Reserve  System 
may  buy  or  sell  farm 

land 

bonds  issued 


under  the  authority  of  this  Act. 


Any  Federal  Reserve  Bank  may 
buy  and  sell  farm  loan  bonds  issued 
under  this  Act  to  the  same  extent 
and  subject  to  the  same  limitations 
placed  upon  the  purchase  and  sale 
by  said  banks  of  State,  county,  dis- 
trict, and  municipal  bonds  under 
subsection  (b)  of  section  fourteen  of 
the  Federal  reserve  Act  approved 
December  twenty-third,  nineteen 
hundred  and  thirteen. 


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RURAL  CREDITS  BILL. 


70 


AS  PASSED  BY  SENATE. 

purposes”  (volume  thirty-six, 
United  States  Statutes  at  Large, 
page  eight  hundred  and  fourteen), 
shall  be,  and  the  same  is  hereby, 
amended  by  adding  a new  para- 
graph at  the  close  of  said  section, 
to  read  as  follows:  “Federal  farm 
loan  bonds  authorized  by  the  Fed- 
eral Farm  Loan  Board  and  issued 
by  any  Federal  land  bank  may  be 
purchased  by  the  trustees,  in  lieu 
of  United  States  bonds  or  other 
securities,  for  the  purpose  of  invest- 
ing postal  savings  deposits  under 
the  provisions  of  this  section.  When- 
ever funds  shall  be  withdrawn  from 
postal  savings  depositaries  for  in- 
vestment, the  trustees  are  hereby 
authorized  to  purchase  Federal  farm 
loan  bonds  in  the  open  market  or 
from  any  Federal  land  bank  au- 
thorized to  issue  the  same:  Pro- 
vided, That  in  no  case  shall  such 
farm  loan  bonds  be  purchased  at 
more  than  par  nor  shall  more  than 
thirty  per  centum  of  the  postal 
savings  deposits  be  invested  at  any 
one  time  in  farm  loan  bonds  as 
herein  provided.” 


STATE  LEGISLATION. 

Sec.  31.  That  it  shall  be  the  duty 
of  the  farm  loan  commissioner  to 
make  examination  of  the  laws  of 
every  State  of  the  United  States 
and  to  inform  the  Federal  Farm 
Loan  Board  as  rapidly  as  may  be 
whether  in  his  judgment  the  laws  of 
each  State  relating  to  the  conveying 
and  recording  of  land  titles,  and  the 
foreclosure  of  mortgages  or  other 
instruments  securing  loans,  as  well 
as  providing  homestead  and  other 
exemptions  and  granting  the  power 
to  waive  such  exemptions  as  re- 
spects first  mortgages,  are  such  as 
to  assure  to  the  holder  thereof  ade- 
quate safeguards  against  loss  in  the 
event  of  default  on  loans  secured  by 
any  such  mortgages. 

Pending  the  making  of  such  ex- 
amination in  the  case  of  any  State, 
the  Federal  Farm  Loan  Board  may 
declare  first  mortgages  on  farm 
lands  situated  within  such  State 
ineligible  as  the  basis  for  an  issue 
of  farm  loan  bonds;  and  if  said  ex- 
amination shall  show  that  the  laws 
of  any  such  State  afford  insufficient 
protection  to  the  holder  of  first 
mortgages  of  the  kinds  provided  in 
this  Act,  the  said  Federal  Farm 
Loan  Board  may  declare  said  first 


AS  PASSED  BY  HOUSE. 


STATE  LEGISLATION. 

This  section,  number  27  in  House  bill,  will  be 
found  on  page  74.  For  cross  reference  and  comparison 
only  it  is  duplicated  here. 

Sec.  27.  That  it  shall  be  the  duty 
of  the  Farm  Loan  Commissioner  to 
make  examination  of  the  laws  of 
every  State  of  the  United  States 
and  to  inform  the  Federal  Farm 
Loan  Board  as  rapidly  as  may  be 
whether  in  his  judgment  the  laws 
of  each  State  relating  to  the  con- 
veying and  recording  of  land  titles, 
and  the  foreclosure  of  mortgages  or 
other  instruments  securing  loans,  as 
well  as  providing  homestead  and 
other  exemptions  and  granting  the 
power  to  waive  such  exemptions  as 
respects  first  mortgages,  are  such  as 
to  assure  the  holder  thereof  ade- 
quate safeguards  against  loss  in  the 
event  of  default  on  loans  secured  by 
any  such  mortgages. 

Pending  the  making  of  such  ex- 
amination in  the  case  of  any  State, 
the  Federal  Farm  Loan  Board  may 
declare  first  mortgages  on  farm 
lands  situated  within  such  State  in- 
eligible as  the  basis  for  an  issue  of 
farm  loan  bonds;  arm  if  said  exami- 
nation shall  show  that  the  laws  of 
any  such  State  afford  insufficient 
protection  to  the  holder  of  first 
mortgages  of  the  kinds  provided  in 
this  act,  the  said  Federal  Farm  Loan 
Board  may  declare  said  first  mort- 


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RURAL  CREDITS  BILL. 


71 


AS  PASSED  BY  SENATE. 

mortgages  on  land  situated  in  such 
State  ineligible  during  the  continu- 
ance of  the  laws  in  question.  In 
making  his  examination  of  the  laws 
of  the  several  States  and  forming 
his  conclusions  thereon  said  farm 
loan  commissioner  may  call  upon 
the  ollice  of  the  Attorney  General  of 
the  United  States  for  any  needed 
legal  advice  or  assistance,  or  may 
employ  special  counsel  in  any  State 
where  he  considers  such  action 
necessary. 

At  the  request  of  the  executive  of 
any  State  the  Federal  Farm  Loan 
Board  shall  prepare  a statement 
setting  forth  in  what  respects  the 
requirements  of  said  board  can  not 
be  complied  with  under  the  existing 
laws  of  such  State. 

EXAMINATIONS. 

Sec.  32. 

That  the  Federal  Farm  Loan  Board 
shall  appoint  as  many 

land  bank 

examiners  as  in  its  judgment  may 
be  required  to  make  careful  exami- 
nations of  the  banks  and  associa- 
tions permitted  to  do  business  under 
this  Act. 

Said  examiners  shall  be  subject  to 
the  same  requirements,  responsi- 
bilities, and  penalties  as  are  appli- 
cable to  national  bank  examiners 
under  the  national  bank  Act,  the 
Federal  reserve  Act,  and  other  pro- 
visions of  law. 


Said  examiners  shall 
be  required  to 
examine  the  condition  of 
every 

national  farm  loan  association  and 
report  the  same  to  the  farm  loan 
commissioner 

at  least  once  each  year, 

and 

to 

examine  and  report  the  condition  of 
every  Federal  land  bank  and  joint 


AS  PASSED  BY  HOUSE. 

gages  on  land  situated  in  such  State 
ineligible  during  the  continuance  of 
the  laws  in  question.  In  making  his 
examination  of  the  laws  of  the  sev- 
eral States  and  forming  his  conclu- 
sions there on  said  Farm  Loan  Com- 
missioner may  call  upon  the  office  of 
the  Attorney  General  of  the  United 
States  for  any  needed  legal  advice  or 
assistance,  or  may  employ  special 
counsel  in  any  State  where  he  con- 
siders such  action  necessary. 

At  the  request  of  the  executive  of 
any  State  the  Federal  Farm  Loan 
Board  shall  prepare  a statement 
setting  forth  in  what  respects  the 
requirements  of  said  board  can  not 
be  complied  with  under  the  existing 
laws  of  such  State. 

EXAMINATIONS. 

Sec.  25. 

That  the  Federal  Farm  Loan  Board 
shall  appoint  as  many 


examiners  as  in  its  judgment  may 
be  required  to  make  careful  exami- 
nations of  the  banks  and  associa- 
tions permitted  to  do  business  under 
this  Act. 

Said  examiners  shall  be  subject  to 
the  same  requirements,  responsi- 
bilities, and  penalties  as  are  appli- 
cable to  national  bank  examiners 
under  the  national  bank  Act,  the 
Federal  reserve  Act,  and  other  pro- 
visions of  law. 

Whenever  directed  by  the  Federal 
Farm  Loan  Board, 

said  examiners  shall 


examine  the  condition  of 
any 

national  farm  loan  association  and 
report  the  same  to  the  Farm  Loan 
Commissioner, 

and 

shall 

examine  and  report  the  condition  of 
every  Federal  land  bank  and  joint 


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RURAL  CREDITS  BILL. 


72 


AS  PASSED  BY  SENATE. 

stock  land  bank  at  least  twice  each 
year. 

Said  examiners  shall  receive  sala- 
ries to  be  fixed  by  the  Federal  Farm 
Loan  Board. 

which  shall  be  paid  by  the  Secretary 
of  the  Treasury  out  of  any  money  in 
the  Treasury  not  otherwise  appro- 
priated. 

DISSOLUTION  AND  APPOINTMENT  OF 
RECEIVERS. 

This  section,  number  35  in  Senate  bill,  will  be 
found  on  page  79.  For  cross  reference  and  compari- 
son only  it  is  duplicated  here. 

Sec.  35.  That  upon 
becoming  satisfied 

that  any  national  farm  loam  asso- 
ciation 

has  refused  to  make  good  defaulted, 
mortgages,  as  required  by  section 
twenty-eight  of  this  Act,  or  upon 
receiving  satisfactory  evidence  that 
any  such  association 

has  failed  to  meet  its  outstanding 
obligations  of  any  description 


whatever  when  due,  and,  is  in  default, 

the  Federal  Farm  Loan  Board  may 
forthwith  declare  such  association 
insolvent  and  appoint  a receiver 
and  require,  of  him  such  bovd  and 
security  as  it  deems  proper.  Such 
receiver,  under  the  direction  of  the 
Federal  Farm  Loan  Board,  shall  take 
possession  of  the  books,  records,  and 
assets  of  every  description  of  such 
association,  collect  all  debts,  dues, 
and  claims  belonging  to  it,  and, 
with  the  approval  of  the  Federal 
Farm  Loan  Board,  or  upon  the 
order  of  a court  of  record  of  com- 
petent jurisdiction,  may  sell  or 
compound  all  bad  or  doubtful 
debts,  and,  on  a like  approval 
or  order,  may  sell  all  the  real  arid  per- 
sonal property  of  such  association, 
on  such  terms  as  the  Federal  Farm 
Loan  Board  or  said  court  shall  di- 
rect. 

Such  receiver  shall  pay  over  all 
money  so  collected  to  the  Treasurer 
of  the  United  States,  subject  to  the 
order  of  the  Federal  Farm  Loan 
Board,  and 


AS  PASSED  BY  HOUSE. 

stock  land  bank  at  least  twice  each 
year. 

Said  examiners  shall  receive  sala- 
ries to  be  fixed  by  the  Federal  Farm 
Loan  Board. 


DISSOLUTION  AND  APPOINTMENT  OF 
RECEIVERS. 


Sec.  26.  That  upon 

receiving  satisfactory  evidence 

that  any  national  farm  loan  asso- 
ciation 


has  failed  to  meet  its  outstanding 
obligations  of  any  description, 

subject  to  the  limitations  of  this 
Act, 


the  Federal  Farm  Loan  Board  may 
forthwith  declare  such  association 
insolvent  and  appoint  a receiver 
and  require  of  him  such  bond  and 
security  as  it  deems  proper.  Such 
receiver,  under  the  direction  of  the 
Federal  F arm  Loan  Board,  shall  take 
possession  of  the  books,  records,  and 
assets  of  every  description  of  such 
association,  collect  all  debts,  dues, 
and  claims  belonging  to  it,  and, 
with  the  approval  of  the  Federal 
Farm  Loan  Board,  or  upon  the 
order  of  a court  of  record  of  com- 
petent jurisdiction,  may  sell  or 
compound  all  bad  or  doubtful 
debts,  and,  on  a like  approval  or 
order,  may  sell  all  the  real  and  per- 
sonal property  of  such  association, 
on  such  terms  as  the  Federal  Farm 
Loan  Board  or  said  court  shall  di- 
reot. 

Such  receiver  shall  pay  over  all 
money  so  collected  to  the  Treasurer 
of  the  United  States,  subject  to  the 
order  of  the  Federal  Farm  Loan 
Board,  and 


shall 


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RURAL  CREDITS  BILL. 


78 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 


also  make  report  to  said  board,  of  all 
his  acts  and  proceedings.  Upon  de- 
fault of  any  obligation , Federal  land 
banks  and  joint  stock  land  banks 
may  be  declared  insolvent  and 
placed  in  the  hands  of  a receiver 


by  the  Federal  Farm  Loan  Board , 

and  proceedings  shall  thereupon  be 
had  in  accordance  with  the  provi- 
sions of  this  section  regarding  na- 
tional farm  loan  associations. 

If  any  national  farm  loan  asso- 
ciation shall  be  declared  insolvent 
and  a receiver  shall  be  appointed 
therefor  by  the  Federal  Farm  Loan 
Board,  the  stock  held  by  it  in  the 
Federal  land  bank  of  its  district 
shall  be  canceled  without  impair- 
ment of  its  liability;  and  all  pay- 
ments on  such  stock,  with  accrued 
dividends,  if  any,  since  the  date  of 
the  last  dividend,  shall  be  first  ap- 
plied to  all  debts  of  the  insolvent 
farm  loan  association  to  the  Fed- 
eral land  bank  and  the  balance,  if 
any,  shall  be  paid  to  the  receiver 
of  said  farm  loan  association:  Pro- 
vided, That  in  estimating  said  debts 
contingent  liabilities  incurred  by 


farm  loan  associations  under  the 
provisions  of  this  Act  on  account 
of  default  of  principal  or  inter- 
est of  indorsed  mortgages  shall 
be  estimated  and  included  as  a 
debt,  and  said  contingent  liabilities 
shall  be  determined  by  agreement 
between  the  receiver  and  the  Fed- 
eral land  bank  of  the  district,  sub- 
ject to  the  approval  of  the  Federal 
Farm  Loan  Board,  and  if  said  re- 
ceiver and  said  land  bank  can  not 
agree,  then  by  the  decision  of  the 
farm  loan  commissioner,  and  the 
amount  thus  ascertained  shall  be 
deducted  in  accordance  with  the 
provisions  of  this  section  from  the 
amount  otherwise  due  the  said 


also  make  report  to  said  board  of  all 
his  acts  and  proceedings.  Upon 
default  of  any  obligation,  Federal 
land  banks  and  joint  stock  land 
banks  may  be  declared  insolvent 
and  placed  in  the  hands  of  a receiver, 

to  be  appointed 

by  the  Federal  Farm  Loan  Board, 

and  proceedings  shall  thereupon  be 
had  in  accordance  with  the  pro- 
visions of  this  section  regarding 
national  farm  loan  associations. 

If  any  national  farm  loan  associ- 
ation shall  be  declared  insolvent 
and  a receiver  shall  be  appointed 
therefor  by  the  Federal  Farm  Loan 
Board,  the  stock  held  by  it  in  the 
Federal  land  bank  of  its  district 
shall  be  canceled  without  impair- 
ment of  its  liability;  and  all  pay- 
ments on  such  stock,  with  accrued 
dividends,  if  any,  since  the  date  of 
the  last  dividend,  shall  be  first  ap- 
plied to  all  debts  of  the  insolvent 
farm  loan  association  to  the  Fed- 
eral land  bank  and  the  balance,  if 
any,  shall  be  paid  to  the  receiver 
of  said  farm  loan  association:  Pro- 
vided, That  in  estimating  said  debts 
contingent  liabilities  incurred  by 

national 

farm  loan  associations  under  the 
provisions  of  this  Act  on  account 
of  default  of  principal  or  inter- 
est of  indorsed  mortgages  shall 
be  estimated  and  included  as  a 
debt,  and  said  contingent  liabilities 
shall  be  determined  by  agreement 
between  the  receiver  and  the  Fed- 
eral land  bank  of  the  district,  sub- 
ject to  the  approval  of  the  Federal 
Farm  Loan  Board,  and  if  said  re- 
ceiver and  said  land  bank  can  not 
agree,  then  by  the  decision  of  the 
Farm  Loan  Commissioner,  and  the 
amount  thus  ascertained  shall  be 
deducted  in  accordance  with  the 
provisions  of  this  section  from  the 
amount  otherwise  due  the  said 

national 


farm  loan  association  for  said  can-  farm  loan  association  for  said  can- 
celed  stock.  Whenever  the  capital  celed  stock.  Whenever  the  capital 
stock  of  a Federal  land  bank  stock  of  a Federal  land  bank 
shall  be  reduced,  the  board  of  di-  shall  be  reduced,  the  board  of  di- 
rectors shall  cause  to  be  executed  rector’s  shall  cause  to  be  executed 
a certificate  to  the  Federal  Farm  a certificate  to  the  Federal  Farm 
Loan  Board,  showing  such  reduc-  Loan  Board,  showing  such  reduc- 
tion of  capital  stock,  and  if  said  tion  of  capital  stock,  and,  if  said 
reduction  shall  be  due  to  the  in-  reduction  shall  be  due  to  the  in- 

solvency  of  a farm  loan  associa-  solvency  of  a 

tion,  the  amount  repaid  to  such 

association. 

42564— S.  Doc.  444,  64-1 10 


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RURAL  CREDITS  RILL. 


74 


AS  PASSED  BY  SENATE. 


No  national  farm  loan  association , 
Federal  land  bank  or  joint  stock 

land  bank  shall 

be  dissolved  without 


the  written  consent  of  the  Federal 
Farm  Loan  Board. 

STATE  LEGISLATION. 

This  section,  number  31  in  Senate  bill,  will  be  found 
on  page  70.  For  cross  reference  and  comparison  only 
it  is  duplicated  here. 

Sec.  31.  That  it  shall  be  the  duty 
of  the  farm  loan  commissioner  to 
make  examination  of  the  laws  of 
every  State  of  the  United  States 
and  to  inform  the  Federal  Farm 
Loan  Board  as  rapidly  as  may  be 
whether  in  his  judgment  the  laws  of 
each  State  relating  to  the  conveying 
and  recording  of  land  titles,  and  the 
foreclosure  of  mortgages  or  other 
instruments  securing  loans,  as  well 
as  providing  homestead  and  other 
exemptions  and  granting  the  power 
to  waive  such  exemptions  as  re- 
spects first  mortgages,  are  such  as 
to  assure  to  the  holder  thereof  ade- 
quate safeguards  against  loss  in  the 
event  of  default  on  loans  secured  by 
any  such  mortgages. 

Pending  the  making  of  such  ex- 
amination in  the  case  of  any  State, 
the  Federal  Farm  Loan  Board  may 
declare  first  mortgages  on  farm 
lands  situated  within  such  State 
ineligible  as  the  basis  for  an  issue 
of  farm  loan  bonds,  and  if  said  ex- 
amination shall  show  that  the  laws 
of  any  such  State  afford  insufficient 
protection  to  the  holder  of  first 
mortgages  of  the  kinds  provided  in 
this  Act,  the  said  Federal  Farm 
Loan  Board  may  declare  said  first 
mortgages  on  land  situated  in  such 
State  ineligible  during  the  continu- 
ance of  the  laws  in  (question.  In 
making  his  examination  of  the  laws 
of  the  several  States  and  forming 
his  conclusions  thereon  said  farm 
loan  commissioner  may  call  upon 
the  office  of  the  Attorney  General  of 
the  United  States  for  any  needed 
legal  advice  or  assistance,  or  may 
employ  special  counsel  in  any  State 
where  he  considers  such  action 
necessary. 


AS  PASSED  BY  HOUSE, 
national 

farm  loan  association, 
also  showing 

the  amount  repaid  to  such  associa- 
tion. 

No  national  farm  loan  association, 
Federal  land  bank  or  joint  stock 

land  bank  shall 

go  into  voluntary  liquidation  with- 
out 

the  written  consent  of  the  Federal 
Farm  Loan  Board. 


STATE  LEGISLATION. 

Sec.  27.  That  it  shall  be  the  duty 
of  the  Farm  Loan  Commissioner  to 
make  examination  of  the  laws  of 
every  State  of  the  United  States 
and  to  inform  the  Federal  Farm 
Loan  Board  as  rapidly  as  may  be 
whether  in  his  judgment  the  laws 
of  each  State  relating  to  the  con- 
veying and  recording  of  land  titles, 
and  the  foreclosure  of  mortgages  or 
other  instruments  securing  loans,  as 
well  as  providing  homestead  and 
other  exemptions  and  granting  the 
power  to  waive  such  exemptions  as 
respects  first  mortgages,  are  such  as 
to  assure  the  holder  thereof  ade- 
quate safeguards  against  loss  in  the. 
event  of  default  on  loans  secured  by 
any  such  mortgages. 

Pending  the.  making  of  such  ex- 
amination in  the  case  of  any  State, 
the  Federal  Farm  Loan  Board  may 
declare  first  mortgages  on  farm 
lands  situated  within  such  State  in- 
eligible as  the  basis  for  an  issue  of 
farm  loan  bonds;  and  if  said  exami- 
nation shall  show  that  the  laws  of 
any  such  State  afford  insufficient 
protection  to  the  holder  of  first 
mortgages  of  the  kinds  provided  in 
this  Act , the  said  F ederal  F arm  Loan 
Board  may  declare  said  first  mort- 
gages on  land  situated  in  such  State 
ineligible  during  the  continuance  of 
the  laws  in  question.  In  making  his 
examination  of  the  laws  of  the  sev- 
eral States  and  forming  his  conclu- 
sions thereon  said  Farm  Loan  Com- 
missioner may  call  upon  the  office  of 
the  Attorney  General  of  the  United 
States  for  any  needed  legal  advice  or 
assistance,  or  may  employ  special 
counsel  in  any  State  where  he  con- 
siders such  action  necessary. 


RURAL  CREDITS  BILL. 


75 


AS  PASSED  BY  SENATE. 

At  the  request  of  the  executive  of  any 
State  the  Federal  Farm  Loan  Board 
shall  prepare  a statement  setting  forth 
in  what  respects  the  requirements  of 
said  board'  can  not  be  complied  with 
under  the  existing  laws  of  such  State. 


PENALTIES. 

Sec.  33. 

That  any  applicant  for  a loan 

from  a national  farm  loan  associa- 
tion, Federal  land  bank,  or  joint 
stock  land  bank 

who  shall  knowingly  make  any  false 
statement  in  his  application  for  such 
loan,  and  any  member  of  a loan 
committee  or  any  appraiser  pro- 
vided for  in  this  Act  who  shall  will- 
fully overvalue  any  land  offered  as 
security  for  loans  under  this  Act, 
shall  be 

> deemed  guilty  of  a misdemeanor 
and  shall  be  imprisoned  not  exceed- 
ing one  year  or  fined  not  more  than 
$5,000,  ' 

or  both.  Any  examiner  appointed 
under  this  Act  who  shall  accept  a 
loan  or  gratuity  from  any 


bank  or 


association  examined  by  him,  or 
from  any  person  connected  with 
any  such  bank  or  association  in  any 
capacity, 

shall  be  deemed  guilty  of  a misde- 
meanor, and 

shall  be 

imprisoned  not  exceeding  one  year 
or  fined  not  more  than  $5,000, 


or  both,  and  may  be  fined  a further 
sum  equal  to  the  money  so  loaned 
or  gratuity  given,  and  shall  forever 
thereafter  be  disqualified  from  hold- 
ing office  as  an  examiner  under  the 
provisions  of  this  Act.  No  exam- 
iner 


AS  PASSED  BY  HOUSE. 

At  the  request  of  the  executive  of 
any  State  the  Federal  Farm  Loan 
Board  shall  prepare  a statement 
setting  forth  in  what  respects  the  re- 
quirements of  said  board  can  not  be 
complied  with  under  the  existing 
laws  of  such  State. 

PENALTIES. 

Sec.  28. 

That  any  applicant  for  a loan 
under  this  Act 


who  shall  knowingly  make  any  false 
statement  in  his  application  for  such 
loan,  and  any  member  of  a loan 
committee  or  any  appraiser  pro- 
vided for  in  this  Act  who  shall  will- 
fully overvalue  any  land  offered  as 
security  for  loans  under  this  Act, 
shall  be 

punished  by  a fine  of  not  exceeding 
$5,000,  or  by  imprisonment  not  ex- 
ceeding one  year, 

or  both.  Any  examiner  appointed 
under  this  Act  who  shall  accept  a 
loan  or  gratuity  from  any 

land 

bank  or 

national  farm  loan 

association  examined  by  him,  or 
from  any  person  connected  with 
any  such  bank  or  association  in  any 
capacity, 


shall  be 

punished  by  a fine  of  not  exceeding 
$5,000,  or  by  imprisonment  not  ex- 
ceeding one  year, 

or  both,  and  may  be  fined  a further 
sum  equal  to  the  money  so  loaned 
or  gratuity  given,  and  shall  forever 
thereafter  be  disqualified  from  hold- 
ing office  as  an  examiner  under  the 
provisions  of  this  Act.  No  exam- 
iner 


while  holding  such  office, 


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RURAL  CREDITS  BILL. 


76 


AS  PASSED  BY  SENATE, 
shall  perform 
any  other  service 
for  compensation 
while  holding  such  office, 


for  any  bank  or  banking  or  loan 
association,  or  for  any  person  con- 
nected therewith  in  any  capacity. 

Any  person  who  shall  falsely 
make,  forge,  or  counterfeit,  or  cause 
or  procure  to  be  falsely  made,  forged, 
or  counterfeited,  or  willingly  aid  or 
assist  in  falsely  making,  forging,  or 
counterfeiting  any  bond,  coupon,  or 
paper  in  imitation  of,  or  purporting 
to'  be  in  imitation  of,  the  bonds  or 
coupons  issued  by  any 


bank  or 


association,  now  or  hereafter  au- 
thorized and  acting  under  the  laws 
of  the  United  States;  or  any  person 
who  shall  pass,  utter,  or  publish,  or 
attempt  to  pass,  utter,  or  publish 
any  false,  forged,  or  counterfeited 
bond,  coupon,  or  paper  purporting 
to  be  issued  by  any  such  bank  or 
association,  knowing  the  same  to  be 
falsely  made,  forged,  or  counter- 
feited ; or  whoever  shall  falsely  alter, 
or  cause  or  procure  to  be  falsely 
altered,  or  shall  willingly  aid  or 
assist  in  falsely  altering  any  such 
bond,  coupon,  or  paper,  or  shall 
pass,  utter,  or  publish  as  true  any 
falsely  altered  or  spurious  bond, 
coupon,  or  paper  issued,  or  purport- 
ing to  have  been  issued , by  any  such 
bank  or  association,  knowing  the 
same  to  be  falsely  altered  or  spu- 
rious, shall  be 

deemed  guilty  of  a misdemeanor 
and  shall  be  fined 


not  exceeding  $5,000  or 


imprisoned 


not  exceeding 


AS  PASSED  BY  HOUSE, 
shall  perform 


for  compensation 


any  other  service 

for  any  bank  or  banking  or  loan 
association,  or  for  any  person  con- 
nected therewith  in  any  capacity. 

Any  person  who  shall  falsely 
make,  forge,  or  counterfeit,  or  cause 
or  procure  to  be  falsely  made,  forged, 
or  counterfeited,  or  willingly  aid  or 
assist  in  falsely  making,  forging,  or 
counterfeiting  any  bond,  coupon,  or 
paper  in  imitation  of,  or  purporting 
to  be  in  imitation  of,  the  bonds  or 
coupons  issued  by  any 

land 

bank  or 

national  farm  loan 

association,  now  or  hereafter  au- 
thorized and  acting  under  the  laws 
of  the  United  States ; or  any  person 
who  shall  pass,  utter,  or  publish,  or 
attempt  to  pass,  utter,  or  publish 
any  false,  forged,  or  counterfeited 
bond,  coupon,  or  paper  purporting 
to  be  issued  by  any  such  bank  or 
association,  knowing  the  same  to  be 
falsely  made,  forged,  or  counter- 
feited; or  whoever  shall  falsely  alter, 
or  cause  or  procure  to  be  falsely 
altered,  or  shall  willingly  aid  or 
assist  in  falsely  altering  any  such 
bond,  coupon,  or  paper,  or  shall 
pass,  utter,  or  publish  as  true  any 
falsely  altered  or  spurious  bond, 
coupon,  or  paper  issued,  or  purport- 
ing to  have  been  issued,  by  any  such 
bank  or  association,  knowing  the 
same  to  be  falsely  altered  or  spu- 
rious, shall  be 


punished  by  a fine  of 
not  exceeding  $5,000  or 

by 

imprisonment 
not  exceeding 


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RURAL  CREDITS  BILL. 


AS  PASSED  BY  SENATE. 

five 

years,  or  both. 

Other  than  the  usual  salary  or 
director’s  fee  paid  to  any  officer, 
director,  or  employee  of  a national 
farm  loan  association,  a Federal 
land  hank,  or  a joint  stock  land 
hank,  and  other  than  a reasonable 
fee  paid  by  such  association  or  hank 
to  any  officer,  director,  attorney,  or 
employee  for  services  rendered,  no 
officer,  director,  attorney,  or  em- 
ployee of  an  association  or  hank 
organized  under  this  Act  shall  he  a 
beneficiary  of  or  receive,  directly  or 
indirectly,  any  fee,  commission, 
gift,  or  other  consideration  for  or 
in  connection  with  any  transaction 
or  business  of  such  association  or 
bank.  No 


bank 

or 


association  organized  under  this 
Act  shall  charge  or  receive  any  fee, 
commission,  bonus,  gift,  or  other 
consideration  not  herein  specific- 
ally authorized.  N o examiner,  pub- 
lic or  private,  shall  disclose  the 
names  of  borrowers  to  other  than 
the  proper  officers  of  a 


farm  loan  association  or  land  bank 
without  first  having  obtained  ex- 
press permission  in  writing  from  the 
Farm  Loan  Commissioner  or  from 
the  board  of  directors  of  such  asso- 
certain  or  bank,  except  when 
ordered  to  do  so  by  a court  of 
competent  jurisdiction  or  by  direc- 
tion of  the  Congress  of  the  United 
States,  or  of  either  House  thereof, 
or  any  committee  of  Congress 

or 

of  either  House  duly  authorized. 
Any  person  violating  any  provision 
of  this  paragraph  shall  be  punished 
by  a fine  of  not  exceeding  $5,000  or 
by  imprisonment  not  exceeding  one 
year,  or  both. 

Any  person  connected  in  any  ca- 
pacity with  any 


AS  PASSED  BY  HOUSE. 

fifteen 

years,  or  both. 

Other  than  the  usual  salary  or 
director’s  fee  paid  to  any  officer, 
director,  or  employee  of  a national 
farm  loan  association,  a Federal 
land  bank,  or  a joint  stock  land 
bank,  and  other  than  a reasonable 
fee  paid  by  such  association  or  bank 
to  any  officer,  director,  attorney,  or 
employee  for  services  rendered,  no 
officer,  director,  attorney,  or  em- 
ployee of  an  association  or  bank 
organized  under  this  Act  shall  be  a 
beneficiary  of  or  receive,  directly  or 
indirectly,  any  fee,  commission, 
gift,  or  other  consideration  for  or 
in  connection  with  any  transaction 
or  business  of  such  association  or 
bank.  No 

land 

bank 

or 

national  farm  loan 

association  organized  under  this 
Act  shall  charge  or  receive  any  fee, 
commission,  bonus,  gift,  or  other 
consideration  not  herein  specific- 
ally authorized.  No  examiner,  pub- 
lic or  private,  shall  disclose  the 
names  of  borrowers  to  other  than 
the  proper  officers  of  a 

national 

farm  loan  association  or  land  bank 
without  first  having  obtained  ex- 
press permission  in  writing  from  the 
Farm  Loan  Commissioner  or  from 
the  board  of  directors  of  such  asso- 
ciation or  bank,  except  when 
ordered  to  do  so  by  a court  of 
competent  jurisdiction  or  by  direc- 
tion of  the  Congress  of  the  United 
States,  or  of  either  House  thereof, 
or  any  committee  of  Congress 


of  either  House  duly  authorized. 
Any  person  violating  any  provision 
of  this  paragraph  shall  be  punished 
by  a fine  of  not  exceeding  §5,000  or 
by  imprisonment  not  exceeding  one 
year,  or  both. 

Any  person  connected  in  any  ca- 
pacity with  any 


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RURAL  CREDITS  BILL. 


78 


AS  PASSED  I$Y  SENATE. 


farm  loan  association,  Federal  land 
bank,  or  joint  stock  land  bank,  who 
embezzles,  abstracts,  or  willfully 
misapplies  any  moneys,  funds,  or 
credits 

thereof, 

or  who  without  authority  from  the 
directors  draws  any  order,  assigns 
any  note,  bond,  draft,  mortgage, 
judgment,  or  decree 

thereof, 

or  who  makes  any  false  entry  in  any 
book,  report,  or  statement  of  such 
association  or  land  bank  with  intent 
in  either  case  to  defraud  such  insti- 
tution or  any  other  company,  body 
politic  or  corporate,  or  any  indi- 
vidual person,  or  to  deceive  any 
officer  of  a 


farm  loan  association  or  land  bank 
or  any  agent  appointed  to  examine 
into  the  affairs  of  any  such  associa- 
tion or  bank,  and  every  person  who 
with  like  intent  aids  or  abets  any 
officer,  clerk,  or  agent  in  any  viola- 
tion of  this  section,  shall  be 

deemed  guilty  of  a misdemeanor 
and  shall  be  fined 


not  exceeding  $5,000  or 


imprisoned 

not  exceeding  five  years,  or  both. 

Any  person  who  shall  deceive, 
defraud,  or  impose  upon,  or  who 
shall  attempt  to  deceive,  defraud, 
or  impose  upon,  any  person,  firm,  or 
corporation  by  making  any  false 
pretense  or  representation  regard- 
ing the  character,  issue,  security,  or 
terms  of  any  farm  loan  bond,  or 
coupon,  issued  under  the  terms  of 
this  Act;  or  by  falsely  pretending 
or  representing  that  any  farm  loan 
bond,  or  coupon,  issued  under  the 
terms  of  this  Act  by  one  class  of 
land  banks  is  a farm  loan  bond,  or 
coupon,  issued  by  another  class  of 
banks;  or  by  fa  sely  pretending  or 
representing  that  any  farm  loan 


AS  PASSED  BY  HOUSE, 
national 

farm  loan  association,  Federal  land 
bank,  or  joint  stock  land  bank,  who 
embezzles,  abstracts,  or  willfully 
misapplies  any  moneys,  funds,  or 
credits 


or  who  without  authority  from  the 
directors  draws  any  ordor,  assigns 
any  note,  bond,  draft,  mortgage, 
judgment,  or  decree 


or  who  makes  any  false  entry  in  any 
book,  report,  or  statement  of  such 
association  or  land  bank  with  intent 
in  either  case  to  defraud  such  insti- 
tution or  any  other  company,  body 
politic  or  corporate,  or  any  indi- 
vidual person,  or  to  deceive  any 
officer  of  a 

national 

farm  loan  association  or  land  bank 
or  any  agent  appointed  to  examine 
into  the  affairs  of  any  such  associa- 
tion or  bank,  and  every  person  who 
with  like  intent  aids  or  abets  any 
officer,  clerk,  or  agent  in  any  viola- 
tion of  this  section,  shall  be 


punished  by  a fine  of 
not  exceeding  $5,000  or 

by 

imprisonment 

not  exceeding  five  years,  or  both. 


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RURAL  CREDITS  BILL. 


79 


AS  PASSED  BY  SENATE. 

bond,  or  coupon,  issued  under  tko 
terms  of  this  Act,  or  anything  con- 
tained in  said  farm  loan  bond,  or 
coupon,  is  anything  other  than,  or 
different  from,  what  it  purports  to 
be  on  the  face  of  said  bond,  or 
coupon,  shall  be  deemed  guilty  of  a 
misdemeanor,  and  shall  bo  fined  not 
exceeding  $5,000  or  imprisoned  not 
exceeding  five  years,  or  both. 

GOVERNMENT  DEPOSITS. 

Sec.  34.  That  the  Secretary  of 
the  Treasury  is  authorized,  upon 
the  request  of  the  Federal  Farm 
Loan  Board,  to  make  advances  or 
deposits  for  the  temporary  use  of 
any  Federal  land  bank,  out  of  any 
money  in  the  Treasury  not  other- 
wise appropriated.  Such  Federal 
land  bank  shall  issue  to  the  Secre- 
tary of  the  Treasury  a certificate  of 
indebtedness  for  any  such  advance 
or  deposit,  bearing  interest  at  the 
rate  of  two  per  centum  per  annum, 
to  be  secured  by  farm  loan  bonds 
or  other  collateral,  to  the  satisfac- 
tion of  the  Secretary  of  the  Treas- 
ury. Any  such  certificate  shall  be 
redeemed  and  paid  by  such  land 
bank  at  the  discretion  of  the  Secre- 
tary of  the  Treasury.  The  aggre- 
gate of  all  sums  so  advanced  or  de- 
posited by  the  Secretary  of  the 
Treasury  in  any  fiscal  year  shall  not 
exceed  the  sum  of  $6,000,000  at  any 
one  time. 


AS  PASSED  BY  HOUSE. 


The  subject  matter  being  the  same'as  in'section  4 o f 
the  House  bill  and  will  be  found  onfpage  10. 

If  at  any  time  a Federal  land  bank, 
the  fair  value  of  whose  assets  is  at 
least  equal  to  the  total  of  its  liabilities, 
shall  find  that  it  may  soon  be  without 
funds,  immediately  available,  suffi- 
cient to  meet  its  obligations  with  re- 
spect to  the  payment,  when  required, 
of  the  principal  of  or  the  interest  on 
bonds  issued  under  this  Act,  or  of 
both  principal  and  interest,  it  may 
make  application  to  the  Federal  Farm 
Loan  Board  for  a temporary  deposit 
by  the  Secretary  of  the  Treasury  of 
the  sum  needed  to  make  such  pay- 
ment during  the  period  for  which  its 
funds,  immediately  available,  will  be 
insufficient,  setting  forth  in  its  appli- 
cation such  information  as  the  Fed- 
eral Farm  Loan  Board  may  require. 
If  after  investigation  the  Federal 
Farm  Loan  Board  approves  said 
application  it  shall  give  notice  thereof 
to  the  Secretary  of  the  Treasury,  stat- 
ing the  sum  required,  the  period  for 
which  needed,  and  such  other  facts  as 
may  be  necessary.  Thereupon  the 
Secretary  of  the  Treasury  may  deposit 
such  sum,  or  from  time  to  time  so  much 
thereof  as  may  be  required,  with  said 
Federal  land  bank,  to  be  expended 
under  the  direction  of  the  Federal 
Farm  Loan  Board  for  the  purposes 
for  which  the  application  for  such  de- 
posit was  approved.  Any  sum  so 
deposited  shall  bear  a rate  of  interest 
fixed  by  the  Secretary  of  the  Treasury , 
not  to  exceed  the  current  rate  charged 
for  other  Government  deposits,  and 
shall  be  repaid  as  may  be  required, 
but  not  later  than  the  expiration  of  the 
period  fixed  by  the  Secretary  of  the 
Treasury.  To  secure  the  repayment 
of  any  such  deposit,  together  with  the 
payment  of  the  interest  thereon,  said 
Federal  land  bank  shall  issue  to  the 
Secretary  of  the  Treasury  its  certifi- 
cate of  indebtedness:  Provided,  That 
the  aggregate  of  all  such  deposits  in 
any  one  Federal  land  bank  by  the 
Secretary  of  the  Treasury  shall  not 
exceed,  in  any  fiscal  year  or  at  one 
time,  the  sum  of  $500,000. 


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RURAL  CREDITS  BILL. 


80 


AS  PASSED  BY  SENATE. 

DISSOLUTION  AND  APPOINTMENT  OF 
RECEIVERS. 


Sec.  35.  That  upon 

becoming  satisfied 

that  any  national  farm  loan  associa- 
tion 

has  refused  to  make  good  defaulted 
mortgages,  as  required  by  section 
twenty-eight  of  this  Act,  or  upon 
receiving  satisfactory  evidence  that 
any  such  association 

has  failed  to  meet  its  outstanding 
obligations  of  any  description 

whateverwhen  due,  and  is  in  default, 

the  Federal  Farm  Loan  Board  may 
forthwith  declare  such  association 
insolvent  and  appoint  a receiver  and 
require  of  him  such  bond  and  se- 
curity as  it  deems  proper.  Such 
receiver,  under  the  direction  of  the 
Federal  Farm  Loan  Board,  shall 
take  possession , of  the  books,  rec- 
ords, and  assets  of  every  description 
of  such  association,  collect  all  debts, 
dues,  and  claims  belonging  to  it 
and,  with  the  approval  of  the  Fed- 
eral Farm  Loan  Board,  or  upon  the 
order  of  a court  of  record  of  com- 
petent jurisdiction,  may  sel  or  co  im- 
pound all  bad  or  doubtful  debts, 
and,  on  a like  approval  or  order, 
may  sell  all  the  real  and  personal 
property  of  such  association,  on 
such  terms  as  the  Federal  Farm 
Loan  Board  or  said  court  shall 
direct.  Such  receiver  shall  pay 
over  all  money  so  collected  to  the 
Treasurer  of  the  United  States, 

subject  to  the  order  of  the  Federal 
Farm  Loan  Board,  and 

shall 

also  make  report  to  said  board  of 
all  his  acts  and  proceedings.  Upon 
default  of  any  obligation,  Federal 
land  banks  and  joint  stock  land 
banks  may  be  declared  insolvent 
and  placed  in  the  hands  of  a receiver 


by  the  Federal  Farm  Loan  Board, 
and  proceedings  shall  thereupon  be 
had  in  accordance  with  the  pro- 
visions of  this  section  regarding 
national  farm  loan  associations 


AS  PASSED  BY  HOUSE. 

DISSOLUTION  AND  APPOINTMENT  OP 
RECEIVERS. 

This  section,  number  26  in  House  bill,  'will  be  found 
on  page  72.  For  cross  reference  and  comparison  only  il. 
is  duplicated  here. 

Sec.  26.  That  upon, 

receiving  satisfactory  evidence 

that  any  national  farm , loan  associa- 
tion 


has  failed  to  meet  its  outstanding  ob- 
ligations of  any  description, 

subject  to  the  limitations  of  this  Act, 

the  Federal  Farm  Loan  Board  may 
forthwith  declare  such  association 
insolvent  and  appoint  a receiver  and, 
require  of  him  such  bond  and  se- 
curity as  it  deems  proper.  Such 
receiver,  under  the  direction  of  the 
Federal  Farm  Loan  Board,  shall 
take  possession  of  the  books,  rec- 
ords, and  assets  of  every  description 
of  such  association,  collect  all  debts, 
dues,  and  claims  belonging  to  it, 
and,  with  the  approval  of  the  Fed- 
eral Farm  Loan  Board,  or  upon  the 
order  of  a court  of  record  of  com- 
petent jurisdiction,  may  sell  or  com- 
pound all  bad  or  doubtful  debts, 
and,  on  a like  approval  or  order, 
may  sell  all  the  real  and  personal 
property  of  such  association,  on 
such  terms  as  the  Federal  Farm 
Loan  Board  or  said  court  shall 
direct.  Such  receiver  shall  pay 
over  all  money  so  collected  to 
the  Treasurer  of  the  United  States, 

subject  to  the  order  of  the  Federal 
Farm  Loan  Board,  and 


also  make  report  to  said  board  of 
all  his  acts  and  proceedings.  Upon 
default  of  any  obligations,  Federal 
land  banks  and  joint  stock  land 
banks  may  be  declared  insolvent 
and  placed  in  the  hands  of  a receiver, 

to  be  appointed 

by  the.  Federal  Farm  Loan  Board, 
and  proceedings  shall  thereupon  be 
had  in  accordance  with  the  pro- 
visions of  this  section  regarding 
national  farm  loan  associations. 


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RURAL  CREDITS  TULL. 


81 


AS  PASSED  BY  SENATE. 

If  any  national  farm  loan  associa- 
tion shall  he  declared  insolvent  and 
a receiver  shall  he  appointed  there- 
for hy  the  Federal  Farm  Loan 
Board,  the  stock  held  hy  it  in  the 
Federal  land  bank  of  its  district 
shall  he  canceled  without  impair- 
ment of  its  liability;  and  all  pay- 
ments on  such  stock,  with  accrued 
dividends,  if  any,  since  the  date  of 
the  last  dividend,  shall  he  first  ap- 
plied to  all  debts  of  the  insolvent 
farm  loan  association  to  the  Federal 
land  bank  and  the  balance,  if  any, 
shall  he  paid  to  the  receiver  of  said 
farm  loan  association:  Provided, 

That  in  estimating  said  debts  con- 
tingent liabilities  incurred  hy 


farm  loan  associations  under  the 
provisions  of  this  Act  on  account  of 
default  of  principal  or  interest  of 
indorsed  mortgages  shall  he  esti- 
mated and  included  as  a debt,  and 
said  contingent  liabilities  shall  be 
determined  by  agreement  between 
the  receiver  and  the  Federal  land 
hank  of  the  district,  subject  to  the 
approval  of  the  Federal  Farm  Loan 
Board,  and  if  said  receiver  and  said 
land  hank  can  not  agree,  then  hy 
the  decision  of  the  farm  loan  com- 
missioner, and  the  amount  thus 
ascertained  shall  be  deducted  in 
accordance  with  the  provisions  of 
this  section  from  the  amount  other- 
wise due  the  said 


farm  loan  association  for  said  can- 
celed stock.  Whenever  the  capital 
stock  of  a Federal  land  bank  shall 
be  reduced,  the  board  of  directors 
shall  cause  to  be  executed  a cer- 
tificate to  the  Federal  Farm  Loan 
Board,  showing  such  reduction  of 
capital  stock,  and  if  said  reduction 
shall  be  due  to  the  insolvency  of 
a farm  loan  association, 

the  amount  repaid  to  such  asso- 
ciation. 


No  national  farm  loan  association, 
Federal  land  bank  or  joint  stock 
land  bank 

shall  be  dissolved 

without  the  written  consent  of  the 
Federal  Farm  Loan  Board. 

42564— S.  Doc.  444,  64-1 11 


AS  PASSED  BY  HOUSE. 

If  any  national  farm  loan  associ- 
ation shall  he  declared  insolvent 
and  a receiver  shall  be  appointed 
therefor  hy  the  Federal  Farm  Loan 
Hoard , the  stock  held  hy  it,  in  the 
Federal  land  hank  of  its  district 
shall  he  canceled  without  impair- 
ment of  its  liability:  and  all  pay- 
ments on  such  stock,  vAth  accrued 
dividends , if  any,  since  the  date  of 
the  last  dividend,  shall  he  first  ap- 
plied to  all  debts  of  the  insolvent 
farm  loan  association  to  the  Federal 
land  hank,  and  the  balance,  if  any, 
shall  he  paid  to  the  receiver  of  said 
farm  loan  association:  Provided, 
That  in  estimating  said  debts  con- 
tingent liabilities  incurred  by 

national 

farm,  loan  associations  under  the 
provisions  of  this  Act  on  account  of 
default  of  principal  or  interest  of 
indorsed  mortgages  shall  be  esti- 
mated and  included  as  a debt,  and 
said  contingent  liabilities  shall  he 
determined  by  agreement  between 
the  receiver  and  the  Federal  land 
hank  of  the,  district,  subject  to  the 
approval  of  the  Federal  Farm  Loan 
Board,  and  if  said  receiver  and  said 
land  bank  can  not  agree,  then  by 
the  decision  of  the  Farm  Loan  Com- 
missioner, and  the  amount  thus  as- 
certained shall  be  deducted  in  ac- 
cordance with  the  provisions  of  this 
section  from  the  amount  otherwise 
due  the  said 

national 

farm  loam  association  for  said  can- 
celed stock.  Whenever  the  cajntal 
stock  of  a Federal  land,  bank  shall  he 
reduced,  the.  board  of  directors  shall 
cause  to  be  executed  a certificate  to 
the  Federal  Farm  Loan  Board , show- 
ing such  reduction  of  capital  stock, 
and,  if  said  reduction  shall  be  due  to 
the  insolvency  of  a, 

national 

farm  loan  association,  also  showing 
the  amount  repaid  to  such  asso- 
ciation. 

No  national  farm  loan  association. 
Federal,  land  bank  or  joint  stock 
land  bank 

shall  go  into  voluntary  liquidation 

without  the  written  consent  of  the. 
Federal  Farm  Loan  Board. 


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RURAL  CREDITS  BILL. 


AS  PASSED  BY  SENATE.  AS  PASSED  BY  HOUSE. 

ORGANIZATION  EXPENSES.  ORGANIZATION  EXPENSES. 


Sec.  36. 

That  the  sum  of  1100,000,  or  so 
much  thereof  as  may  be  necessary, 
is  hereby  appropriated,  out  of  any 
money  in  the  Treasury  not  other- 
wise appropriated,  to  be  expended 
under  the  direction  of  the  Federal 
Farm  Loan  Board,  for  the  purpose 
of  carrying  into  effect  the  provi- 
sions of  this  Act. 

LIMITATION  OF  COURT  DECISIONS. 

Sec.  37. 

That  if  any  clause,  sentence,  para- 
graph, or  part  of  this  Act  shall  for 
any  reason  be  adjudged  by  any 
court  of  competent  jurisdiction  to 
be  invalid,  such  judgment  shall  not 
affect,  impair,  or  invalidate  the  re- 
mainder of  this  Act,  but  shall  be 
confined  in  its  operation  to  the 
clause,  sentence,  paragraph,  or  part 
thereof  directly  involved  in  the 
controversy  in  which  such  judg- 
ment shall  have  been  rendered. 

REPEALING  CLAUSE. 

Sec.  38. 

That  all  Acts  or  parts  of  Acts  incon- 
sistent with  this  Act  are  hereby 
repealed,  and  this  Act  shall  take 
effect  upon  its  passage.  The  right 
to  amend,  alter,  or  repeal  this  Act 
is-  hereby  expressly  reserved. 


“An  Act  to  provide  capital  for  agri- 
cultural development,  to  create 
standard  forms  of  investment  based 
upon  farm  mortgage,  to  equalize 
rates  of  interest  upon  farm  loans,  to 
furnish  a market  for  United  States 
bonds, 

to  provide  for  the  investment  of 
postal  savings  deposits 

to  create  Government  depositaries 
and  financial  agents  for  the  United 
States,  and  for  other  purposes.” 

Passed  the  Senate  May  3 (calen- 
dar day,  May  4),  1916. 

Attest : 

James  M.  Baker, 

Secretary. 


Sec.  29. 

That  the  sum  of  $100, 000,  or  so 
much  thereof  as  may  be  necessary, 
is  hereby  appropriated,  out  of  any 
money  in  the  Treasury  not  other- 
wise appropriated,  to  be  expended 
under  the  direction  of  the  Federal 
Farm  Loan  Board,  for  the  purpose 
of  carrying  into  effect  the  provi- 
sions of  this  Act. 

LIMITATION  OF  COURT  DECISIONS. 

Sec.  30. 

That  if  any  clause,  sentence,  para- 
graph, or  part  of  this  Act  shall  for 
any  reason  be  adjudged  by  any 
court  of  competent  jurisdiction  to 
be  invalid,  such  judgment  shall  not 
affect,  impair,  or  invalidate  the  re- 
mainder of  this  Act,  but  shall  be 
confined  in  its  operation  to  the 
clause,  sentence,  paragraph,  or  part 
thereof  directly  involved  in  the 
controversy  in  which  such  judg- 
ment shall  have  been  rendered. 

REPEALING  CLAUSE. 

Sec.  31. 

That  all  Acts  or  parts  of  Acts  incon- 
sistent with  this  Act  arc  hereby 
repealed,  and  this  Act  shall  take 
effect  upon  its  passage.  The  right 
to  amend,  alter,  or  repeal  this  Act 
is  hereby  expressly  reserved. 

Amend  the  title  so  as  to  read: 
“An  Act  to  provide  capital  for  agri- 
cultural development,  to  create 
standard  forms  of  investment  based 
upon  farm  mortgage,  to  equalize 
rates  of  interest  upon  farm  loans,  to 
furnish  a market  for  United  States 
bonds, 


to  create  Government  depositaries 
and  financial  agents  for  the  United 
States,  and  for  other  purposes.” 

Passed  the  House  of  Representa- 
tives with  amendments  May  15, 
1916. 

South  Trimble, 

Clerk. 


o 


